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Consider a market with a demand curve given (in inverse form) by P(Q) = 80 – 0.25Q

Part 1 

Consider a market with a demand curve given (in inverse form) by P(Q) = 80 – 0.25Q, where Q is total market output and P is the price of the good. Two firms compete in this market by simultaneously choosing quantities q1 and q2 (where q1 + q2 = Q). 

This is an example of 

Choose one: 

A. Stackelberg competition. 

B. Cournot competition. 

C. Bertrand competition. 

D. perfect competition.


Part 2 

Now suppose the cost of production is constant at $50.00 per unit (and is the same for both firms). If the two firms are maximizing profit, they will each produce _______ units. The total amount of production will be _______ units and the price of the good will be $_______  (Give all numerical answers to two decimal places.)

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