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2.The inverse market demand in a homogeneous-product Cournot duopoly is P = 200 3( Q 1+ Q 2) and costs are C 1( Q 1)

2.The inverse market demand in a homogeneous-product Cournot duopoly isP= 200 3(Q1+Q2) and costs areC1(Q1) = 26Q1andC2(Q2) = 32Q2.

a.Determine the reaction function for each firm.

b.Calculate each firm's equilibrium output.

c.Calculate the equilibrium market price.

d.Calculate the profit each firm earns in equilibrium.

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