Question
Suppose there are two firms that produce bottled water, each with a constant marginal cost of $2 per unit, and that demand for bottled water
Suppose there are two firms that produce bottled water, each with a constant marginal cost of $2 per unit, and that demand for bottled water is given by Q= 100-5p
(a) What is the market equilibrium price and quantity when each firm behaves as a Cournot duopolist choosing quantities? What are firms' profits?
(b) What is the market equilibrium price and quantity when each firm behaves as a Bertrand duopolist choosing price? What are firms' profits?
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Microeconomics
Authors: Paul Krugman, Robin Wells
3rd edition
978-1429283427, 1429283424, 978-1464104213, 1464104212, 978-1429283434
