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Suppose there are two firms, Bitter and Gold each selling identical tasting non alcoholic beer. consumers of this beer have no brand loyalty so market
Suppose there are two firms, Bitter and Gold each selling identical tasting non alcoholic beer. consumers of this beer have no brand loyalty so market demand can be expressed as P = 5 - 0.001 ( QB + QG). Bitter's marginal function revenue can be written as MR = 5 - 0.001 (2QB + QG) and symmetrically for Gold. Bitter has a constant cost of $4 ( MC = AC = 4 ) per unit, Gold,s constant cost is $2 per unit. Assuming the firm behave as Cournot competitors, in Nash equilibrium, Gold will produce how many units?
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