In a two firm market, let the marginal cost of producing a product be $20, the market demand be given by the function Q = 60 P/2 and the market quantity be equal to Q1 + Q2.

a) Calculate the Cournot equilibrium quantity each firm would produce in this market. What's the equilibrium price?

b) Draw the best response function diagram corresponding to your solution. Cournot equilibrium occurs at the point where the two best response functions intersect.