Question: A market has inverse demand function P = 37 - (q 1 + q 2 ) where q 1 is the quantity produced by firm

A market has inverse demand function

P = 37 - (q1 + q2)

where q1 is the quantity produced by firm 1 and q2 is the quantity produced by firm 2.

The two firms have identical cost functions, with marginal cost MC = 7.

What is firm 1's best response function?

A market has inverse demand function

P = 37 - (q1 + q2)

where q1 is the quantity produced by firm 1 and q2 is the quantity produced by firm 2.

The two firms have identical cost functions, with marginal cost MC = 7.

What is firm 1's best response function?

A.q1 = 15 - q2/2

B.q1 = 30 - q2/2

C.q1 = 22 - q2

D. q1 = 37 + q2

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