Consider two ice cream vendors having the Cournot competition, this time the second vendor can produce...

 

Transcribed Image Text:

Consider two ice cream vendors having the Cournot competition, this time the second vendor can produce the ice cream at a lower cost of $3 per gallon. Hence the payoff functions (profits) are: 20 Ju₁ (91, 92) (120 - ¹92)91 - 591 [u₂ (91, 92) = (120 — 91+9²) 92 — 392. 20 What is the Nash equilibrium in this case? Consider two ice cream vendors having the Cournot competition, this time the second vendor can produce the ice cream at a lower cost of $3 per gallon. Hence the payoff functions (profits) are: 20 Ju₁ (91, 92) (120 - ¹92)91 - 591 [u₂ (91, 92) = (120 — 91+9²) 92 — 392. 20 What is the Nash equilibrium in this case?

Answer rating: 100% (QA)

Lets solve this Cournot duopoly model stepbystep 1 Given the demand ... View the full answer