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    Output Produced of Fortune Cookies

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    1. Market demand for fortune cookies is given by P = 500 - Q, where Q is tons of cookies. There are two firms producing cookies at zero cost.

    a. Find each firm's fortune if the two collude.
    b. Find each firm's fortune if they act as rivals in a Cournot duopoly.
    c. Ditto if they act as competitors.

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    Solution Summary

    Market demand for fortune cookies is examined.