Consider a market served by duopolists. The market’s demand function is given by D(p) = 3600 − 40p. The marginal cost for firms in this market is constant at MC = 30, and firms have zero fixed costs. Here, we restrict our attention to “one-shot” games.
(a) [ What price and quantity, p m and Qm, would a monopolist set in this market? What is its corresponding profit level, Πm?