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Use a cell reference or a single formula where appropriate in order to receive full credit. Do not copy and paste values or type
Use a cell reference or a single formula where appropriate in order to receive full credit. Do not copy and paste values or type values, as you will not receive full credit for your answers. The inverse market demand curve for a duopoly market is p = 14- Q = 14-91-92, where Q is the market output, and 91 and 92 are the outputs of Firms 1 and 2 respectively. Each firm has a constant marginal cost of 2 and a fixed cost of 4. Consequently, the Nash- Cournot best-response curve for Firm 1 is q = 6-92/2. The best-response curve for Firm 2 is 92 = 6-91/2, which can be written as 91-12-292- P 14 6 91 6 92 MC FC 2 4 Q 14 - 92/2 91-92 91/2 a) Calculate the output (BR) and the profit for Firm 2, the total output, and the price for a = 0, 2, ..., 12. BR q1 Q Profit 0 1 2 3 4 5 6 7 8 9 10 11 12 Use the scatterplot option to draw the best-response curve for Firm 2.
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