Question
You are the manager ofBilly's Burritos, one of only two suppliers of tasty fish tacos in town.Billy's Burritos and itscompetitor, Ellen'sEnchiladas, compete in a Cournot
You are the manager ofBilly's Burritos, one of only two suppliers of tasty fish tacos in town.Billy's Burritos and itscompetitor, Ellen'sEnchiladas, compete in a Cournot duopoly. The weekly demand for fish tacosis:
Q=9010P
where Q is the quantity of fish tacos and P is the price of a fish taco. The totalquantity, Q, of fish tacos is equalto:
Q=qB+qE
where qB is the quantity of fish tacos produced byBilly's Burritos and qE is the quantity of fish tacos produced byEllen's Enchiladas. The demand function can be solved for the price as a function of thequantity, which is the inversedemand:
P=90.10Q.
Each firm incurs a total cost of producing and selling qi fish tacosof:
TCqi=120+3qi.
The Cournot quantity of fish tacos that each firm produces each week will be
nothing
tacos.
When each firm produces its Cournotquantity, the resulting market price of a fish taco is $
nothing
per taco.
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