Question: Because of their unique expertise with explosives the Zambino brothers

Because of their unique expertise with explosives, the Zambino brothers have long enjoyed a monopoly of the U. S. market for public fireworks displays for crowds above a quarter of a million. The annual demand for these fireworks displays is P = 140 - Q. The marginal cost of putting on a fireworks display is 20. A family dispute broke the firm in two. Alfredo Zambino now runs one firm and Luigi Zambino runs the other. They still have the same marginal costs, but now they are Cournot duopolists. How much profit has the family lost?

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  • CreatedDecember 12, 2014
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