Let the profit and cost functions be p(yT) = 60 – yT, Each firms cost functions equal the square of its output.

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Oligopoly problem – Let the profit and cost functions be p(yT) = 60 – yT, Each firms cost functions equal the square of its output.

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• Identify the reaction functions for Firm 1 and Firm 2
• Identify the profit level for each firm
• Describe in brief detail what would happen in the case of a) Collusion, and b)Stackelberg games (where Firm 1 is the leader)

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