Question: Demand in a duopoly is given by p = 100 - Q. Both firms have marginal cost c. a. An inventor has developed a technique

Demand in a duopoly is given by p = 100 - Q. Both firms have marginal cost c.

a. An inventor has developed a technique which will reduce the marginal cost of either (or both) firms to c-d. If the inventor commits to selling to one firm only (and both firms know this), how much are firms willing to pay for the invention?

b. If the inventor sells to both firms, how much is each firm willing to pay for the invention?

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