Consider aCournot duopoly. The market demand function is P = 130 - (q1 + q2), where P is the market price, q1 is the output produced by Firm 1 and q2 is the output produced by Firm 2. Firm 1 has a constant marginal cost c1 =10 and firm 2 has a constant marginal cost c2 = 40. Which is false?

A.

Firm 1 best response function is: q1 = max{60 - 0.5q2, 0}

B.

Firm 2 best response function is: q2 = max{45 - 0.5q1, 0}

C.

(q1*, q2*) = (60, 0) is a Nash equilibrium

D.

(q1*,q2*) = (50, 20) is a Nash equilibrium