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(Solved): Assume that the market demand for aphrodisiac bath oils is P=300-2Q. Assume that each firm has a co ...



Assume that the market demand for aphrodisiac bath oils is

P=300-2Q

. Assume that each firm has a constant marginal and average total cost of

$25

: hence MC =

25

a) (8 marks) - (Must show convincing working for full marks if correct answer. If NO working or correct answer, then 5/8 for table.) b) Although the Bertrand oligopoly appears to have the best outcome for consumer welfare, in the real-world however, why might the Bertrand oligopoly not necessarily be the best for consumers? ( 2 marks)



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