3. Assume that two companies (C and D) are duopolists that produce identical products.Demand for the products is given by the following linear demand function:P = 600 - Qc - QDwhere Qc and Qp are the quantities sold by the respective firms and P is the sellingprice. The total cost functions for the two companies areTCc = 25,000+ 100QCTCp = 20,000 + 100QD%3DAssume that the firms form act independently as in the Count model (i.e., each firmassumes that the other firm's output will not change).Determine the long-run equilibrium output and selling price for each firm.a.b.Determine that total profits for each firm at the equilibrium output found in Part (a).

Cournot equilibrium is the level of output at which each firm in the oligopoly maximizes its…

3. Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function: P = 600 - Qc - QD where Qc and Qp are the quantities sold by the respective firms and P is the selling price. The total cost functions for the two companies are TCC 25,000 + 100Q¢ %3D TCD = 20,000 + 100QD Assume that the firms form act independently as in the Count model (i.e., each firm assumes that the other firm's output will not change). Determine the long-run equilibrium output and selling price for each firm. a. b. Determine that total profits for each firm at the equilibrium output found in Part (a).

3. Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function: P = 600 - Qc - QD where Qc and Qp are the quantities sold by the respective firms and P is the selling price. The total cost functions for the two companies are TCC 25,000 + 100Q¢ %3D TCD = 20,000 + 100QD Assume that the firms form act independently as in the Count model (i.e., each firm assumes that the other firm's output will not change). Determine the long-run equilibrium output and selling price for each firm. a. b. Determine that total profits for each firm at the equilibrium output found in Part (a).

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

3. Assume that two companies (C and D) are duopolists that produce identical products.
Demand for the products is given by the following linear demand function:
P = 600 - Qc - QD
where Qc and Qp are the quantities sold by the respective firms and P is the selling
price. The total cost functions for the two companies are
TCc = 25,000+ 100QC
TCp = 20,000 + 100QD
%3D
Assume that the firms form act independently as in the Count model (i.e., each firm
assumes that the other firm's output will not change).
Determine the long-run equilibrium output and selling price for each firm.
a.
b.
Determine that total profits for each firm at the equilibrium output found in Part (a).

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