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(40 points) Suppose there are two firms in a market who each simultaneously choose a quantity. Firm 1's quantity is q1, and firm 2's quantity
(40 points) Suppose there are two firms in a market who each simultaneously choose a quantity. Firm 1's quantity is q1, and firm 2's quantity is q2. Therefore the market quantity is Q = q1 + q2. The market demand curve is given by P = 100 - 4Q. Also, each firm has constant marginal cost equal to 28. There are no fixed costs. The marginal revenue of the two firms are given by: MR1 = 100 - 8q1 - 4q2 MR2 = 100 - 4q1 - 8q2.
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