Cournot Duopoly Model with costs. Suppose the following linear demand curve in the market: Y 100

Cournot Duopoly Model with costs. Suppose the following linear demand curve in the market: Y ¼ 100  2p and equal linear total cost function for each duopolist as follows: TCðAÞ ¼ 1 2 YA þ 10YA and TCðBÞ ¼ 1 2 YB þ 10YA

a. Setting up the maximum profit conditions, build a set of isoprofit curves for each duopolist, visualizing them in a chart.

b. Visualize then the reaction curves and calculate the market equilibrium quantity Y ¼ Y A þ Y B and the equilibrium price p*.