We return to the duopolist example covered in class. There are two firms of equal size operating in a market whose annual demand has recently changed. The new annual demand is depicted in the graph. Each firm faces constant Marginal Costs of $20 per unit, with zero fixed costs (for simplicity).

Price ($) 130 120 110 100 90 80 70 60 50 40 30 20 MC 10 0 MR D 0 10 20 30 40 50 60 70 80 90 100 110 120 130 Quantity