In a homogeneous-good Cournot duopoly where both firms have a constant marginal cost m and the inverse
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In a homogeneous-good Cournot duopoly where both firms have a constant marginal cost m and the inverse market demand function is p = a − bQ, show that the Nash-Cournot equilibrium output of a typical firm is q = (a − m)/3b. Show that the corresponding equilibrium price is p = (a + 2m)/3.
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A typical firm has profit of pq i mq i a bQq i mq i The firm maximizes profit by ...View the full answer
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Related Book For
Managerial Economics and Strategy
ISBN: 978-0134167879
2nd edition
Authors: Jeffrey M. Perloff, James A. Brander
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