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Thank you Problem 3 - Cournot Consider the Cournot duopoly model where inverse demand is P(q1 + 92) = max {0, a - (q1 +

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Problem 3 - Cournot Consider the Cournot duopoly model where inverse demand is P(q1 + 92) = max {0, a - (q1 + q2)} where q1, 92 are non-negative output levels of the two firms respectively. Suppose the firms have asymmetric marginal costs: c, for firm 1 and c2 for firm 2. What is the Nash equilibrium if 0 a + c1? Note: In this problem please be alert to the possibility of non-interior solutions

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