Consider a market with a demand curve given (in inverse form) by P(Q) = 80 0.25Q,
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Question:
Consider a market with a demand curve given (in inverse form) by P(Q) = 80 – 0.25Q, where Q is total market output and P is the price of the good. Two firms compete in this market by simultaneously choosing quantities q1 and q2 (where q1 + q2 = Q).
This is an example of
Choose one:
A. Stackelberg competition.
B. Cournot competition.
C. Bertrand competition.
D. perfect competition.
Part 2
Now suppose the cost of production is constant at $50.00 per unit (and is the same for both firms). If the two firms are maximizing profit, they will each produce _______ units. The total amount of production will be _______ units and the price of the good will be $_______ (Give all numerical answers to two decimal places.)
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