The demand curve for pizza in Smalltown is Q = 130 - P, where Q represents the quantity demanded for pizza, and P represents the market price for...
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# Could you please help me solve this question: alt="Question.jpg" />Thanks a lot! ATTACHMENT PREVIEW Download attachment Question.jpg The demand curve for pizza in Smalltown is Q = 130 - P, where Q represents the quantity demanded for pizza, and P represents the market price for pizza. There are two pizza restaurants in Smalltown: Restaurant A and Restaurant B. Both Restaurants A and B have the same cost of production: Total Cost TC = 10Q, so MC = 10. 1. If Restaurants A and B cooperate (acting as a single-price monopolist) and split the market equally, what would be the total market output (total of Restaurants A and B) and market price at the equilibrium? Please show and explain clearly how you get the answers using a table, a graph, or mathematically. (5 points) 2. If Restaurants A and B cooperate as a monopoly (like in Part a) and practice perfect price discrimination, what would the total market output (total of Restaurants A and B), market price, and size of economic profit for Restaurants A and B in total at the equilibrium? Please show and explain clearly how you get the answers using a table, a graph, or mathematically. (5 points) 3. Construct the Best Response Function of Restaurants A and B, and derive the duopoly quantity. Based on the Best Response Function of Restaurant A, show that Restaurant A will not stay in cooperation with Restaurant B as described in Part a) but will cheat. Please show and explain clearly how you get the answers using a table, a graph, or mathematically. (8 points) 4. Continuation of Part c), if they both cheat, what would be the total market output (total of Restaurants A and B), market price, and size of economic profit for Restaurants A and B in total at the equilibrium? (3 points)

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