Question: . Consider the following duopoly. Demand is given by P = 10-Q, where Q = Q + Q, The firm's cost functions are :

. Consider the following duopoly. Demand is given by P = 10-Q,

. Consider the following duopoly. Demand is given by P = 10-Q, where Q = Q + Q, The firm's cost functions are : C,(Q) - 4 + 2Q, and C(Q) = 3 + 3Q, (a) Suppose both firms have entered the industry. What is joint profit maximising level of output? Howmuch will each firm produce? How would your answer change if the firms have not yet entered the industry? 15 (b) What is each firm's equilibrium output and profit if they behave non-co- 15 operatively?

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