Demand in a market dominated by two firms (a Cournot duopoly) is determined according to: P = 200 – 2(Q₁ + Q₂), where P is the market price, Q₁ is the quantity demanded by Firm 1, and Q₂ is the quantity demanded by Firm 2. The marginal cost and average cost for each firm is constant; AC=MC = $75.

The Cournot-duopoly equilibrium quantity produced by each firm is _____.

Hint: Write your answer to two decimal places.

Answer rating: 100% (QA)

Solution Given that Market demand function P 200 2Q 1 Q 2 Average Cost Marginal Cost 75 First we hav... View the full answer