Two rival companies sell software packages that are perfect substitutes. The software is sold over the web
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Question:
Two rival companies sell software packages that are perfect substitutes. The software is sold over the web as a download, so the marginal cost and fixed costs are zero. The demand for the software is Q = 900 - P. Assume that these firms are Cournot duopolists. Derive the reaction functions for the two firms, the quantity each will produce, and the market price that will be charged and profits earned.
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
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