Question: Two rival companies sell software packages that are perfect substitutes. The software is sold over the web as a download, so the marginal cost is

Two rival companies sell software packages that are perfect substitutes. The software is sold over the web as a download, so the marginal cost is zero. The demand for the software is Q = 900 - P. Assume that these firms are Cournot duopolists. Derive the reaction functions for the two firms, the quantity each will produce, and the market price that will be charged and profits earned.

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