# Question

(Cournot Duopoly Revisited) Consider the Cournot duopoly model where the (inverse) demand is P (Q) = a – Q. The two firms now have asymmetric marginal costs: c1 for firm 1 and c2 for firm 2.

(a) What is the Nash equilibrium if 0 < ci < a/2, i ( (1, 2(for each firm?

(b) What is the Nash equilibrium if 0 < c1 < c2 < a, but 2c2 > a + c1?

(a) What is the Nash equilibrium if 0 < ci < a/2, i ( (1, 2(for each firm?

(b) What is the Nash equilibrium if 0 < c1 < c2 < a, but 2c2 > a + c1?

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