Question
Two firms are producing identical goods and compete using quantity (Cournot competition). The market demand is given as Q=500-2P. Firm 1 has a marginal cost
Two firms are producing identical goods and compete using quantity (Cournot competition). The market demand is given as Q=500-2P. Firm 1 has a marginal cost of 40, firm 2 has a marginal cost of 50. (30%)
1) Find the MR of each firm, the decision variable is quantity
2) Find the reaction function of each firm
3) Find the equilibrium quantity of each firm and the market price
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Managerial Economics Applications, Strategies and Tactics
Authors: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
13th edition
1285420926, 978-1285962399, 978-1285947853, 1285947851, 978-1285420929
