where Q=qA + qB denotes the aggregate supply of mineral water.
b
i.
MC for both the firms = 0
At equilibrium, both firms should charge Price = Marginal Cost because if any firm charges any price above this setting, then that firm will loose the entire market share and no firm wants to bear losses by charging less than MC
So, firm A and B charges P = 0
Demand curve:
P = 12 - Q/3
Q/3 = 12
Q = 36
qA = qB = 18
Profits:
firm A = firm B = 0 (since P = 0)
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