Question: Consider a market where the inverse demand function is p =100 - Q , Q = q1+q2. Both firms in the market have a constant

Consider a market where the inverse demand function isp=100 -Q,Q= q1+q2. Both firms in the market have a constant marginal cost of $10 and no fixed costs. Suppose these two firms are engaged in Cournot competition. Now answer the following questions:

a)Define best response function. Find the best response function for each firm.

b)Find Cournot-Nash equilibrium quantities and price.

c)Compare Cournot solution with monopoly and perfect competitive solutions.

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