Question
The inverse market demand in a homogeneous-product Cournot duopoly is P = 200 - 3( Q 1 + Q 2 ) and costs are C
The inverse market demand in a homogeneous-product Cournot duopoly isP= 200 - 3(Q1+Q2) and costs areC1(Q1) = 26Q1andC2(Q2) = 32Q2.
a. Determine the reaction function for each firm.
Firm 1:Q1=?
Firm 2:Q2=?
b. Calculate each firm's equilibrium output.
Firm 1: ?
Firm 2: ?
c. Calculate the equilibrium market price.
$ ?
d. Calculate the profit each firm earns in equilibrium.
Firm 1: $ ?
Firm 2: $ ?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Business Intelligence
Authors: Jerzy Surma
1st Edition
1606491857, 9781606491850
