Suppose instead that Lysol and Clorox were competing using quantities (Cournot Competition). Also suppose that the...
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Suppose instead that Lysol and Clorox were competing using quantities (Cournot Competition). Also suppose that the respective marginal cost for each firm is MC/ysol = 2 = AC lysol and MC clorox=2=AC clorox. The inverse demand equation is still P = 5 - Q. a. Exactly how many units will Lysol and Clorox supply? Hint: You have to first derive the reaction curves for each firm i. Lysol supply: ii. Clorox supply: b. What price will disinfectant be sold for in the market? c. How much revenue and profit will each firm make? i. Lysol revenue: ii. Clorox revenue: iii. Lysol profit: iv. Clorox profit: Suppose instead that Lysol and Clorox were competing using quantities (Cournot Competition). Also suppose that the respective marginal cost for each firm is MC/ysol = 2 = AC lysol and MC clorox=2=AC clorox. The inverse demand equation is still P = 5 - Q. a. Exactly how many units will Lysol and Clorox supply? Hint: You have to first derive the reaction curves for each firm i. Lysol supply: ii. Clorox supply: b. What price will disinfectant be sold for in the market? c. How much revenue and profit will each firm make? i. Lysol revenue: ii. Clorox revenue: iii. Lysol profit: iv. Clorox profit:
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