Question
Two firms face the following demand curve:P=50-5Q, Where Q=Q1+Q2. The firms cost functions are C1(Q1)= 20+10Q for firm 1 and C2(Q2)=10+12Q2 for firm 2. A)
Two firms face the following demand curve:P=50-5Q, Where Q=Q1+Q2. The firms cost functions are C1(Q1)= 20+10Q for firm 1 and C2(Q2)=10+12Q2 for firm 2.
A) Suppose both firms entered the industry. What is the joint profit maximizing level of output?
B)What is each firms equilibrium output and profitif they behave non -cooperatively ?Use the cournot model
C) How much should firm 1 be willing to purchase firm 2 if collusion is illegal but a takeover is not?
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The American Economy
Authors: Walter Greason, William Gorman
1st Edition
1524902675, 9781524902674
