Question
The inverse demand function in a Cournot duopoly is P=50-5Q, where Q=Q1+Q2. The firm's marginal cost functions are MC 1 =10, MC 2 =12=10 C
The inverse demand function in a Cournot duopoly is P=50-5Q, where Q=Q1+Q2. The firm's marginal cost functions are MC1=10, MC2=12=10C for Firm 1 and Firm 2, respectively, where c follows from your candidate number.
a)Find the reaction functions for both firms
b)What are the quantities and prices?
c)What are the firm's profits?
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Introduction to Econometrics
Authors: James H. Stock, Mark W. Watson
3rd edition
133595420, 978-0138009007, 138009007, 978-0133486872, 133486877, 978-0133595420
