Question: Demand for a product is given by , P ( Qd ) = 2 1 5 0 0 Qd . The product is supplied by

Demand for a product is given by, P(Qd)=21500 Qd. The product is supplied by two firms that produce identical products, each of which has MC =1 and no fixed costs. Each firm maximizes profit assuming that the others output will not change (Cournot behavior).(a) Derive each firms best-response function (best-response function).(b) Calculate the Cournot-Nash equilibrium price, quantity, and profit of each firm. (c) If the two firms operated as one and maximized joint profits (1+ 2), what would be the price, quantities, and profits?

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