Two firms figure out that the market inverse demand is P= 81 - Q. Each firm has

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Two firms figure out that the market inverse demand is P= 81 - Q. Each firm has the cost C(Q)= Q^2.

1. Find the marginal revenue for the individual firms.

2. What is the reaction function for each firm?

3.What is the equilibrium quantity?

4. What is the market price?

5. How much profit does each firm make?

6. In the long-run what do you expect to happen in a market with profits like this? Find the optimal production for the following duopolists:

7. Find the marginal revenue, marginal cost, and optimal production in a duopoly market with inverse demand,

P= 36 - 3Q, and production costs, C(q1)= 3q^2 and C(q2)=6 * q^2.

Related Book For answer-question

Industrial Organization Markets and Strategies

ISBN: 978-1107069978

2nd edition

Authors: Paul Belleflamme, Martin Peitz

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Posted Date: Feb 23, 2024 12:00 AM

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Two firms figure out that the market inverse demand is P= 81 - Q. Each firm has

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firm So optimal production for each firm is Q3 Lets solve each part step by step 1 Marginal Revenue ... View the full answer

Industrial Organization Markets and Strategies

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