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.
Attached is the suggested solution to your problem in MS Word format. I spent a lot of time trying to explain each step, so it should be easy to follow ...
Market demand for fortune cookies is examined.