1. TC(Q) = 10Q + 2000
2. TC(Q) = 10Q +2000

Revenue is $20 per quanity (Q) sold.

If you assume quantity is uncertain, and both company 1 and 2 expect, Q=2000, probability 1-P, and Q=5,000 with probability P. Show in equilibrium both will open when P>0.296 and only one will when P<0.296

How do you prove this:

You equate it so that: 7,000p = 2000

P = 0.296.

How do you prove that both will open at a probability higher and one at a probability lower? If you substitute, the lower gives a negative value and higher gives positive. What does that prove?