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Competing duopolists both have MC=1 (and no fixed costs) and face inverse demand p=2 - 2Q, where Q=q1+q2 is total output. What is Firm 2's
Competing duopolists both have MC=1 (and no fixed costs) and face inverse demand p=2 - 2Q, where Q=q1+q2 is total output. What is Firm 2's best response function, q2*(q1)?
a)
q2*(q1) = (1-2q1)/3.
b)
q2*(q1) = (1-q1)/3.
c)
q2*(q1) = (1-q1)/4.
d)
q2*(q1) = (1-2q1)/4.
e)
q2*(q1) = (1-2q1)/2.
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