Consider the following variant of the Cournot Model: Two firms simultaneously choose how much to produce...

 

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Consider the following variant of the Cournot Model: Two firms simultaneously choose how much to produce and sell on the market. The inverse demand is given by P(Q) = 120-2Q. Firm 1's costs are given by C(91) = 891 and firm 2's costs are given by C(42) = 1292- a. Find the Nash Equilibrium prices and quantities of this game. (10 pts) b. Suppose that Firm 3 enters this market and firm 3's costs are C(93) = 16q3. What are the new Nash Equilibrium prices and quantities? (10 pts) Consider the following variant of the Cournot Model: Two firms simultaneously choose how much to produce and sell on the market. The inverse demand is given by P(Q) = 120-2Q. Firm 1's costs are given by C(91) = 891 and firm 2's costs are given by C(42) = 1292- a. Find the Nash Equilibrium prices and quantities of this game. (10 pts) b. Suppose that Firm 3 enters this market and firm 3's costs are C(93) = 16q3. What are the new Nash Equilibrium prices and quantities? (10 pts)

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a To find the Nash Equilibrium prices and quantities in the given Cournot Model lets denote the quantity produced by firm 1 as q1 and the quantity pro... View the full answer