Question: Your college is considering renting space in the student union
Your college is considering renting space in the student union to one or two commercial textbook stores. The rent the college can charge per square foot of space depends on the firms’ profit (excluding rent) and hence on whether the market has a monopoly or a Cournot duopoly. Which number of stores is better for the college in terms of rent? Which is better for students? Why?
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