Question: Need help using Cournot Competition Problem 2. (Cournot Competition) Two protmaximizing oligopolists produce electricity. They set their productions levels, ql and q2, simultaneously. Each rm's

Need help using Cournot Competition

Problem 2. (Cournot Competition) Two protmaximizing oligopolists produce electricity. They set their productions levels, ql and q2, simultaneously. Each rm's cost function is given by C(q) = (12. The price of unit electricity is denoted by 19... Suppose that the market demand is given by Q = q1 + (12 = D603) = 12 pg. 1. Write down each rm's prot maximization problem. 2. Determine each rm's best response function (i.e., BR1(q2) and BR2(q1)). 3. Determine the optimal (equilibrium) levels of production (1100 and qg". 4. Illustrate that the Cournot equilibrium price pea\" is higher than the competitive equi librium price pf

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