that the two firms are able to form a cartel. Derive the output each firm will produce, the market price, and the total profit under the cartel solution.
Consider two firms, Firm A and Firm B, who compete as duopolists. Each firm produces a
The total inverse demand curve for the industry is P = 250 – (QA + QB). Firm A has a
total cost curve CA(Q) = 100 + Q2. Firm B has a total cost curve CB (QB) = 100 + 2QB.