The inverse market demand in a homogeneous- product Cournot duopoly is P = 200 3(Q1 +
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The inverse market demand in a homogeneous- product Cournot duopoly is P = 200 – 3(Q1 + Q2) and costs are C1(Q1) = 26Q1 and C2( Q2) = 32Q2.
a. Determine the reaction function for each firm.
b. Calculate each firm’s equilibrium output.
c. Calculate the equilibrium market price.
d. Calculate the profit each firm earns in equilibrium.
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a and b Q 1 20 Q 2 18 ...View the full answer
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Related Book For
Managerial Economics and Business Strategy
ISBN: 978-0073523224
8th edition
Authors: Michael Baye, Jeff Prince
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