Suppose that firm 1 and firm 2 operate under conditions of constant average and marginal cost but
Question:
(a) Supposee two firms practice Cournot competition, that is, choosing quantities for their identically product simultaneously. Compute the Nash equilibrium quantity.
(b) Compute firms' prices, profit and market outcome in the Nash equilibrium.
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Step by Step Answer:
a Given Market demand is Q 500 20P Then inverse demand function is P 25 005Q Here Q q1 q2 So the inv...View the full answer
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Related Book For 
Intermediate Microeconomics and Its Application
ISBN: 978-0324599107
11th edition
Authors: walter nicholson, christopher snyder
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