Question: Consider a variant version of the Cournot model we learned in class. Two firms compete through output and the inverse demand function is P(Q) =

Consider a variant version of the Cournot model we learned in class. Two firms

compete through output and the inverse demand function is P(Q) = 100 Q

where Q is the total output. Both firms have a constant marginal cost but Firm

1 is more efficient. Specifically, Firm 1 has cost function C1(q1) = 10q1 and Firm

2 has cost function C2(q2) = 20q2. Find the Nash equilibrium of the game.

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