Answer neatly with proper explanation of each option given. Thank you 17. Suppose in a Cournot duopoly that two firms, Firm 1 and Firm 2, face market demand P =50 - Q and both have marginal cost, MC = $20. Firm 1's reaction function can be written as:a) Q₁ = 450.5Q2b) Q₁ = 25 -0.5Q₂c) Q₁ = 15 – 0.5Q2d) Q₁ = 100.5Q₂

Given Market inverse demand function P=50-Q The market consists of two firms that are engaged in…

17. Suppose in a Cournot duopoly that two firms, Firm 1 and Firm 2, face market demand P = $20. Firm 1's reaction function can be written as: 50Q and both have marginal cost, MC = a) Q₁ b) Q₁ c) Q1₁ d) Q₁ = 45 – 0.5Q2 25 – 0.5Q2 :15 - 0.50₂ 10 - 0.50₂ = = =

17. Suppose in a Cournot duopoly that two firms, Firm 1 and Firm 2, face market demand P = $20. Firm 1's reaction function can be written as: 50Q and both have marginal cost, MC = a) Q₁ b) Q₁ c) Q1₁ d) Q₁ = 45 – 0.5Q2 25 – 0.5Q2 :15 - 0.50₂ 10 - 0.50₂ = = =

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Answer neatly with proper explanation of each option given. Thank you

17. Suppose in a Cournot duopoly that two firms, Firm 1 and Firm 2, face market demand P =
50 - Q and both have marginal cost, MC = $20. Firm 1's reaction function can be written as:
a) Q₁ = 450.5Q2
b) Q₁ = 25 -0.5Q₂
c) Q₁ = 15 – 0.5Q2
d) Q₁ = 100.5Q₂

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