Question: Consider duopoly Where firms I 2 supply the same product _ The two firms Simultaneously decide their production quantities: firm I 2 Chooses The

Consider duopoly Where firms I 2 supply the same product _ The

Consider duopoly Where firms I 2 supply the same product _ The two firms Simultaneously decide their production quantities: firm I 2 Chooses The function is p = 200 y Where y is the aggregate supply. The COSI function Of firm I is = > O is parameter, and the COSt function Of firm 2 is = 2"} _ Note that the higher is the it is for firm I to produce (for if = 0_5, then the function Of firm I = and if = 2 then the COSt function Of firm I the WSPOtiSe functions for firm. For Which Of does firm I a COSt 2 which Of does firm I have A COSt over firm 2? explain the intuition your answer. 2. the Nash equilibrium A function Of t he parameter a. Calculate the aggregate quantity produced in the market calculate F 3. = I plot the best in a "2 y-diagram. Show the N ash equilibrium in the diagram.

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