Question
Problem # 2 (9 points): Consider two identical firms (A and B) that face the following linear market demand curve and marginal cost: P =
Problem # 2 (9 points): Consider two identical firms (A and B) that face the following linear market demand curve and marginal cost:
P = 1200 - Q, where Q = Q1 + Q2 and MC = 0.
a)Derive firms A and B output-reaction curves.
b)Calculate the Cournot equilibrium quantity per firm and price in this market.
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Macroeconomics
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone
8th Canadian Edition
134646355, 9780134842615 , 978-0134646350
