Assume that there are two firms in an industry, each producing with a constant marginal cost function

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Assume that there are two firms in an industry, each producing with a constant marginal cost function of MC = 10. Assume that the demand function for the product is defined as follows: Q = 200 – 2P.

a) Derive the best reaction functions for both firms. (5 marks)

b) Determine the cournot equilibrium quantities and cournot equilibrium price.

Related Book For answer-question

Microeconomics

ISBN: 978-0073375854

2nd edition

Authors: Douglas Bernheim, Michael Whinston

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Posted Date: Oct 23, 2019 08:00 AM

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Assume that there are two firms in an industry, each producing with a constant marginal cost function

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Microeconomics

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