6.2 Use the data from Exercise 6.1. The best-response curve for Firm 2 is q2 = 6...
Question:
6.2 Use the data from Exercise 6.1. The best-response curve for Firm 2 is q2 = 6 - q1/2, which can be written as q1 = 12 - 2q2.
a. Create a spreadsheet with columns denoted BR2, q1, Q, p, and Profit2. Set the output of Firm 1 in the second column from 0 to 6 in increments of one unit. Fill in the spreadsheet and use the scatterplot option to draw the best-response curve for Firm 2.
b. Create a new spreadsheet showing the bestresponse curves for Firm 1 and Firm 2 on the same diagram, with q2 on the horizontal axis and q1 on the vertical axis. What is the Nash-
Cournot equilibrium price, quantity (for each firm), and profit (for each firm)?
Step by Step Answer:
Related Book For
Managerial Economics And Strategy
ISBN: 9780135640944
2nd Global Edition
Authors: Jeffrey M. Perloff, James A. Brander
Question Posted: