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Consider a market with two firms. Let the cost function of each firm be C(q) = mq where q >0. Let the inverse demand functions

Consider a market with two firms. Let the cost function of each firm be C(q) = mq where q >0. Let the inverse demand functions of firms 1 and 2 be P1 (q1, q2) = a-q1-sq2 and P2(q1, q2) = a-q2-sq1, respectively. Assume that 0 < s < 1 and a > m > 0. Find the Cournot equilibrium quantities of the two firms.

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