Firm A = monopolist
Market demand: y = 150 - p
Total cost: C(y) = 30y
y = quantity of machines
p = price per machine
a) After being the monopolist for awhile, there's a new firm entering the market. Both firms will be choosing output simultaneously (new firm has the same cost function)
How many machines would you recommend firm A to produce? How many machines would you anticipate firm B will produce?
b) There's a mole in the company -> firm B will make output decision after seeing firm A's output. Give your new output decisions.