2 firms competing on price choice and facing the following market demand functions: 91 = 60 – 4p, + 2p2 92 = 64 – 4pz + 1.5p1 Neither firm has a fixed cost and their marginal cost is constant at 2 i) Determine the equilibrium output and price assuming the two firms move simultaneously ii) Determine the equilibrium output and price assuming that firm 1 moves first and

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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1B

b) Consider 2 firms competing on price choice and facing the following market demand
functions:
q1 = 60 – 4p1 + 2p2
q2 = 64 – 4p2 + 1.5p1
Neither firm has a fixed cost and their marginal cost is constant at 2
i)
Determine the equilibrium output and price assuming the two firms move
simultaneously
Determine the equilibrium output and price assuming that firm 1 moves first and
firm 2 moves after
Transcribed Image Text:b) Consider 2 firms competing on price choice and facing the following market demand functions: q1 = 60 – 4p1 + 2p2 q2 = 64 – 4p2 + 1.5p1 Neither firm has a fixed cost and their marginal cost is constant at 2 i) Determine the equilibrium output and price assuming the two firms move simultaneously Determine the equilibrium output and price assuming that firm 1 moves first and firm 2 moves after
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