Type of product and has identical long run average costs

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An industry is a duopoly. Each firm produces an identical type of product and has identical long run average costs of $10 per unit. The market demand curve is Q=40-P. In this fake world, each firm can produce a non-integer quantity of product.

a) If the firms in the industry are allowed to collude, then calculate the profit-maximizing price, total quantity in the market and total combined profits of both firms.

b) In an alternate scenario to part (a), suppose that the industry reaches a Bertrand equilibrium, then the calculate the profit-maximizing price, total quantity in the market and total combined profits of bothh firms.

Reference no: EM131098329

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