1. Suppose there is a Cournot duopoly comprised of firms a and b. Total industry output is the sum of output from both firms so that Q = (qa + qb). Industry demand is given by P=60- 3/2 Q. Both firms have identical cost functions, with Ca = 10+qa and Cb = 25+qb. a. Find the Cournot Nash Equilibrium. Show your work in the space below.
1. Suppose there is a Cournot duopoly comprised of firms a and b. Total industry output is the sum of output from both firms so that Q = (qa + qb). Industry demand is given by P=60- 3/2 Q. Both firms have identical cost functions, with Ca = 10+qa and Cb = 25+qb. a. Find the Cournot Nash Equilibrium. Show your work in the space below.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Typed plz and asap thanks wrong answer not accepted take care of pilgrisim provide quality answer if I get wrong answer I will give down vote as well as from other students
Transcribed Image Text:1. Suppose there is a Cournot duopoly comprised of firms a and b. Total industry output is the sum of
output from both firms so that Q = (qa + qb ). Industry demand is given by P = 60 3/2.Q. Both
firms have identical cost functions, with Ca = 10+ qa and Cb = 25+ qb.
a. Find the Cournot Nash Equilibrium. Show your work in the space below.
b. Suppose that firm a is the leader in a Stackelberg Game. Find the Stackelberg Nash
Equilibrium. Show your work.
c. At the Stackelberg Nash Equilibrium social welfare is W = $
Show your work.
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