Consider a market with the following demand curve: P = 400-2Q
Two firms are competing A & B: With MCa = Mcb = 112.
Suppose marginal cost are constant and identical for both firms.
We assume: P > AVC.
- Find DWL Under Monopoly with firm A as the Monopolist:
- Find the DWL under Cournot Duopoly:
- Find DWL under Stackelberg Duopoly: