captainmarvel
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any micro kings here can help? mark harris T12 last qns. I catch no ball leh. How does it link to oligopoly? and cournot? feeling damn stupid now :/
Part a is not oligopoly, but for part b the application of the question is the same as the theory of Cournot equilibrium.. because Alice and Bill are making a simultaneous decision on quantity (which is the optimal contribution towards the parents' support that Alice and Bill choose). Instead of a regular "profit maximisation" problem, it's a "utility maximisation" one. So you have to write out the utility function of one person, differentiate it and then equate it to zero, to get the maximum utility value. It's the exact same theory as in a regular Cournot question, where you write out the profit function, differentiate it since you're maximising profit!