Question
Consider a Cournot duopoly in which the two firms have different marginal costs.The inverse demand in the market is P(Q) = 15 -Q. Thecosts of
Consider a Cournot duopoly in which the two firms have different marginal costs.The inverse demand in the market is P(Q) = 15 -Q. Thecosts of firm A and firm B areCA(qA) = 6qAand CB(qB) = 3qB, respectively.a.What is the best response (or reaction) function of firm A?b.What is the best response (or reaction) function of firm B?c.What are the equilibriumquantities produced by each firm?d.What is the market price?e.What are the profits of each firm?
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International Business
Authors: John Daniels, Lee Radebaugh, Daniel Sullivan
15th edition
133457230, 978-0133457230
