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Help with this problem, please! Thank you! A community of electricity consumers have the following inverse demand function: yr: 2q+60 [$M'Uh] There are two power
Help with this problem, please! Thank you!
A community of electricity consumers have the following inverse demand function: yr: 2q+60 [$M'Uh] There are two power generating companies, A and B, supplying this community of consumers. The cost functions are: I Company A: c4(q4)=2qi [$th] - Company B: 63(q3)=3q' [sh] Where, q,l and q; are the production levels for Company A and B respectively. Note that the total electricity consumption is equal to the total production supplied by the two companies, i.e., q=qd+q3 . Now please answer the following questions: 1} Considering Cournot competition model, what are the production levels for company A and company B at the equilibrium? What is the electricity price .1 at the equilibrium? 2} At the equilibrium, what is the marginal cost for each company? Comparing to the electricity price .1 , what phenomenon do you observe and whyStep by Step Solution
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