Sam and Lizzy are white maize meal production duopoly companies that face a market demand function P=300-3Q where Q = Qs +QL. QS denotes quantity produces by Sam and QL denotes quantity produces by Lizzy. Both forms have a marginal cost of R100.00.
1. Derive the equatiin for each firm's reaction curve (5 marks)
2. Find the Cournot equilibium quantity quantity per company, price, profit and thereafter show them in a graph of these curces (8 marks)
3. Find the equilibrium price in the meal mealie market if it is perfectly competitive (3 marks)
4. Find the equilibrium price, quantity and profits if the companies
colluded to form a cartel (6 marks)
5. Find the Betrand equilibrium price in the market ( 3 marks)
6. Find the Cournot equilibrium price quantities and industry price in this market (3 marks)
7. Find the Cournot equilibrium quantities and industry price when Sam's marginal cost is R100 while Lizzy's marginal cost is R90. (5 marks)