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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
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 GreaseTech has a marginal cost of $20. Assume that neither firm has any fixed cost. What will the market price for an oil change be? price of oil changes: $
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