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Consider an industry consisting of two firms. Both firms have the identical marginal cost, given by MCi=c for firm i. Industry demand is given by
Consider an industry consisting of two firms. Both firms have the identical marginal cost, given by MCi=c for firm i. Industry demand is given by the inverse demand function P=Q0.5 where Q=q1+q2. a. Calculate the Cournot equilibrium amount of output for each firm. b. Show that each firm's profit goes down when c ges up. .. Show that q2 is a strategic complement for q7 if 0q20.5q1
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