I was looking at the answer for Why P=MC instead of MR=MC? The willingness of the customer to pay should decrease with each additional unit because of the law of diminishing returns, which makes me think it should be MR=MC in equilibrium.
TR = P*Q = 400Q-4Q^2.
MR = dTR/dQ = 400-8Q.
400-8Q=140.
260=8Q.
Q = 32.5 units.

P = 400 - 4Q
= 400 - 4*32.5
= 400 - 130
= $270

Maybe I don't know when to use price instead of marginal revenue. What am I missing?

Walmart and target are the only stores in a remote town that currently stock and sell the playstation 5 video game console. managers at both stores are simultaneously deciding whether to charge a price of $1,000 or $1,500 for each console. if both stores charge $1,000, they earn a profit of $100,000 each. if both stores charge $1,500, they earn a profit of $200,000 each. if one store charges $1,000 and the other store charges $1,500, the store that charges $1,000 earns a profit of $250,000 and the firm that charges $1,500 earns a profit of $50,000. if walmart and target they can both charge $1,500 and earn the highest combined profit available. engage in spirited price competition collude with each other privately undercut each other after making an agreement compete with each other only with regard to price and not quantity compete with each other only with regard to quantity and not price