Suppose mountain spring water can be produced at no cost and that the demand and marginal revenue curves for mountain spring water are given as follows:
Q= 6000 - 5P MR = 1200 - 0.4Q
Refer to Scenario 1. What will be the price in the long run if the industry is a Cournot duopoly?
a) Competition will drive the price to zero
b) $900
c) $400
d) $600
e) $800