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Consider a market with two identical firms: Firm A and Firm B. The market demand is P = 56 4 Q, where Q = qA
Consider a market with two identical firms: Firm A and Firm B.
The market demand is P = 56 4 Q, where Q = qA + qB.
Firms' cost structure is such that MCA = MCB = ACA = ACB = 4. Write the expression for the firms' reaction functions:
(a) Firm A's reaction function =
(Write the function in its simplest form. Reduce numeric values to the smallest number of decimal places required.)
(b) Firm B's reaction function =
(Write the function in its simplest form. Reduce numeric values to the smallest number of decimal places required.)
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