Question: If the inverse market demand function facing a duopoly is p = a - bQ, what are the Nash- Cournot equilibrium quantities if the marginal
If the inverse market demand function facing a duopoly is p = a - bQ, what are the Nash- Cournot equilibrium quantities if the marginal cost of Firm 1 is m and that of Firm 2 is m + x, where x > 0? Which firm produces more and which has the higher profit?
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Firm 1s profit is 1 q 1 a bq 1 q 2 mq 1 Consequently it... View full answer
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