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I have an economic question about 2 companies in Cournot competition. The demand curve is P = 1400-2Q; MR = 1400-4Q and the MC =
I have an economic question about 2 companies in Cournot competition. The demand curve is P = 1400-2Q; MR = 1400-4Q and the MC = 200
This is how I solved:
Company 1 Residual Demand = 1400-q2e - 2q1 MR = 1400-q2e -4q1
Company 2 Residual Demand = 1400 - q1e - 2q2 MR = 1400-q1e-4q2
Then apply Nash EQ so 1400-5q=200
q=240
My classmates and I are in disagreement with how we each set up the Residual Demand
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