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Two firms produce homogeneous outputs with cost functions C1= (q1)2 C2= 2(q2)2 And the inverse demand function P= 100 - ( q1 + q2 )
Two firms produce homogeneous outputs with cost functions C1= (q1)2 C2= 2(q2)2 And the inverse demand function P= 100 - ( q1 + q2 ) Show that at the Cournot-Nash equilibrium firm2 makes higher profit than the joint-profit maximizing equilibrium. (Hint: i-Find joint profit maximizing equilibrium outputs for firm1 and firm2, joint profit maximizing equilibrium profits for firm1 and firm2 and joint profit maximizing equilibrium price; ii-Find Cournot-Nash equilibrium outputs for firm1 and firm2, Cournot-Nash equilibrium profits for firm1 and firm2 and Cournot-Nash equilibrium price)
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