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Use the following information to answer the next three questions Two firms, Butterfly and Stiga, compete as Cournot duopolists in the market for table
Use the following information to answer the next three questions Two firms, Butterfly and Stiga, compete as Cournot duopolists in the market for table tennis paddles. The market demand for table tennis paddles is given by P = 150 - SQ. Both firms face the same marginal cost curve: MC = 75. Both firms have zero fixed costs. 73) What is Stiga's reaction function? a) qstiga = 7.5 0.5 qButter-fly b) 15-2 C) qstiga 0.5 d) qStiga 7.5 2 74) How much profit do Butterfly and Stiga make in a Cournot-Nash equilibrium? a) Both Butterfly and Stiga make O dollars of profits. b) Butterfly makes 125 dollars of profits, while Stiga makes 125 dollars of losses. c) Butterfly makes 125 dollars of losses, while Stiga makes 125 dollars of profits. d) Both Butterfly and Stiga make 125 dollars in profits.
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