Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 17

Consider a homogeneous-product duopoly where each firm initially produces at a constant marginal cost of $200 and there are no fixed costs. Determine what would happen to each firm's equilibrium output and profits if firm 2's marginal cost increased to $210 but firm 1's marginal cost remained constant at $200 in each of the following settings:
a. Cournot duopoly.
b. Sweezy oligopoly.