Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

OilPro and Grease Tech are the only two firms who provide oil changes in a local market in a Cournot duopoly. The oil changes performed

image text in transcribed
image text in transcribed
OilPro and Grease Tech are the only two firms who provide oil changes in a local market in a Cournot duopoly. The oil changes performed by the two firms are identical, and consumers are indifferent about which firm they will purchase an oil change from. The market inverse demand for oil changes is P = 100-20, where Q is the total number of oil changes (in thousands per year) produced by the two firms, qo + qG. OilPro has a marginal cost of $12 per oil change, whereas Grease Tech has a marginal cost of $20. Assume that neither firm has any fixed cost. How much profit does each firm earn? OilPro: $ thousand Grease Tech: $ thousand

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Marketing

Authors: Philip Cateora

16th Edition

0073529974, 9780073529974

More Books

Students also viewed these Economics questions

Question

Make eye contact when talking and listening

Answered: 1 week ago

Question

Do not go, wait until I come

Answered: 1 week ago

Question

Pay him, do not wait until I sign

Answered: 1 week ago