Question
5.Suppose there are two firms, Boors and Cudweiser, each selling identical-tasting nonalcoholic beer. Consumers of this beer have no brand loyalty so market demand can
5.Suppose there are two firms, Boors and Cudweiser, each selling identical-tasting nonalcoholic beer. Consumers of this beer have no brand loyalty so market demand can be expressed as .Boors' marginal revenue function can be written and symmetrically for Cudweiser.Boors operates with out-of-date technology and has constant cost of $4 per unit , whereas Cudweiser has constant cost of $2 per unit.Assuming the firms behave as Cournot competitors, in the Nash equilibrium, Cudweiser will produce
a.1,333
b. 2,333
c. 3,333
d. 4,333
ANSWER: c
6.Consider the same market for nonalcoholic beer as in the previous question.How many units will Boors produce in the Nash equilibrium?
a. 1,333
b. 2,333
c. 3,333
d. 4,333
ANSWER: a
NOTES: Please note that the answers are already given but I need steps taken to these answers. Kindly be clear and show all the steps. Thank you.
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