Question
Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function:
Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function:
P=1000QCQD
where QC and QD are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are
- TCC=15,000+50QC
- TCD=10,000+75QD
Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm's output will not change). Please, fimd the equilibrium output of firm C.
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International Economics Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
9th Edition
978-0132146654, 0132146657, 9780273754091, 978-0273754206
