Question
In one market, the inverse demand is P = 100 - 1/4Q and the marginal cost for all firms is MC = 20. Use these
In one market, the inverse demand is P = 100 - 1/4Q and the marginal cost for all firms is MC = 20. Use these equations to answer the following question. Show all computations.
1.The two firms compete in a Cournot duopoly.
a.What is the reaction function of firm 1?
b.How much will each firm produce in equilibrium?
c.What is the total production in the industry?
d.What is the equilibrium price?
e.What is the effect of increased competition on Price and Quantity?
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Financial Accounting Making The Connection
Authors: J David Spiceland, Wayne Thomas, Don Herrmann
1st Edition
0077862260, 9780077862268
