In a homogeneous-good Cournot duopoly where both firms have a constant marginal cost m and the inverse

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In a homogeneous-good Cournot duopoly where both firms have a constant marginal cost m and the inverse market demand function is p = a − bQ, show that the Nash-Cournot equilibrium output of a typical firm is q = (a − m)/3b. Show that the corresponding equilibrium price is p = (a + 2m)/3.

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Managerial Economics and Strategy

ISBN: 978-0134167879

2nd edition

Authors: Jeffrey M. Perloff, James A. Brander

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