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Topic 2 (Collusion and Entry-Deterrence)

  • The answer to Question 4(a) has been corrected and a new version of the solution packet posted, as of 12/14/2018. The correct answer is that a single firm's quantity will be greater as a monopolist than as a participant in a Cournot duopoly. For a worked-out example, please see the Hertz/Avis example presented in the Lecture 2 slides.