Market demand for a commodity is given by P(Q) = 200 - 4Q. The firms have the identical cost structures, where c(q) = 8q
a) Compute price, total quantity, and quantity per firm for two Cournot firms.
b) Suppose one firm is able to act as a Stackelberg leader and the other behaves as a follower. Compute price, total quantity, and quantity per firm under Stackelberg.
c) Compare the profit per firm under Cournot and Stackelberg. Which market would you rather operate in?