Question
Two firms sell a standardized product in a Cournot oligopoly.The inverse demand for the market is P = 580 - 3Q where Q = (Q1+
Two firms sell a standardized product in aCournotoligopoly.The inverse demand for the market isP = 580 - 3QwhereQ = (Q1+ Q2).The cost functions areC1(Q1) = 4Q1andC2(Q2) = 4Q2. What is the optimal output level for firm 1?
True or False: Firm 1 and Firm 2 will have the same optimal output level.
What is the equilibrium price in this market?
At the optimal output level and equilibrium price, what are firm 1's profits?
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International Business Competing in the Global Marketplace
Authors: Charles W. L. Hill
11th edition
1259578119, 978-1259578113
