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Two firms have just received licenses to produce structural grade plastic lumber (SGPL) in Ontario Canada. The annual demand (in million board feet) for SGPL
Two firms have just received licenses to produce structural grade plastic lumber (SGPL) in Ontario Canada. The annual demand (in million board feet) for SGPL is given by Q = 2400 - 30P where P is the price in Canadian dollars. The marginal cost of producing SGPL is zero because the producers are actually paid enough to receive the recyclable materials to offset the incremental labor costs. The two firms (Firm A and Firm B) each have to decide how large a factory to build. The factory cost will be a one-time fixed cost that is unrelated to the scale of production (within the range they are considering.) a. (3 points) Determine the Cournot Equilibrium for Firms A & B. Include their quantities and the market price
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