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Consider the Cournot duopoly with linear inverse demand function P = a - Q, where P is the market price and Q = q1 +
Consider the Cournot duopoly with linear inverse demand function P = a - Q, where P is the market price and Q = q1 + q2 is the total quantity supplied. Two firms have asymmetric constant marginal costs: c1 for firm 1 and c2 for firm 2. What is the Nash equilibrium if 0 < ci < a/2, i = {1, 2}. What if c1 < c2 < a, but 2c2 > a + c1?
please explain every steps of your reasoning. Thanks.
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