Question
4) Suppose there are two firms in the market that produce differentiated products. Firms compete on quantity simultaneously. The demand faced by: company 1 is
4) Suppose there are two firms in the market that produce differentiated products. Firms compete on quantity simultaneously. The demand faced by:
company 1 is P1 = 70-3Q1-Q2 company 2 is P2 = 70-Q1-3Q2
Where Q1 is the quantity produced by firm 1, and Q2 the quantity produced by firm 2. Moreover, to simplify the problem, suppose that firms have no production costs.
Calculate the optimal set of prices and outputs
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Modern Principles of Economics
Authors: Tyler Cowen, Alex Tabarrok
3rd edition
1429278390, 978-1429278416, 1429278412, 978-1429278393
