Answered step by step
Verified Expert Solution
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
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 many oil changes will each firm produce in a Cournot equilibrium? OilPro: thousand oil changes Grease Tech: thousand oil changes
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started