In the initial Cournot duopoly equilibrium, both firms have constant marginal costs, m, and no fixed costs,
Question:
Let market demand be
P = a-bQ,
where a and b are positive parameters with 2 firms.
Let q1 and q2 be the amount produced by firm 1 and firm 2, respectively. Assuming it is optimal for the firm one to produce, its best-response function is
q1=???.
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Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
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