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Bill and Ted are two Cournot duopolists in the market for organic coffee. Industry demand is P = 100 - Q , where P is
Bill and Ted are two Cournot duopolists in the market for organic coffee. Industry demand is P = 100 - Q, where P is price per kilogram and Q is the quantity of kilograms (in thousands) sold per month. Each firm has constant marginal (and average) costs of 30 per kilogram. Derive each firm's reaction function and solve for the Cournot Nash equilibrium quantity of each firm. In a fully labelled diagram, draw both reaction functions as well as the Nash equilibrium.
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