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2. MBI and Pear are the only producers of computers in the U.S. The market demand for computer is Q=1200-p. The cost of production for
2. MBI and Pear are the only producers of computers in the U.S. The market demand for computer is Q=1200-p. The cost of production for each of them are represented by cost functions C1(q1)=10q1 and C2(q2)=20q2. Suppose each firm would choose their output simultaneously. (a) Derive the reaction functions of the two firms. (b) Calculate the Cournot equilibrium output and profits of the two firms
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