6. Two firms, Firm 1 and Firm 2 and are engaged in Cournot competition. The inverse demand they arefacing is given by p = 50-q, with p being the price of the good, and q being total quantity demanded,given by q = 91 +92, where 9₁ and 92 are the productions of firm 1 and 2 respectively. The total costof firm 1 is TC1(91) = q and of firm 2 is TC₂ (92) = 292.(a) Find the Cournot equilibrium and the price that corresponds to it.(b) Find the Lerner Index of each firm.

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6. Two firms, Firm 1 and Firm 2 and are engaged in Cournot competition. The inverse demand they are facing is given by p= 50-q, with p being the price of the good, and q being total quantity demanded, given by q = 9₁ +92, where q₁ and q2 are the productions of firm 1 and 2 respectively. The total cost of firm 1 is TC1(91) = q and of firm 2 is TC2 (92) = 292. (a) Find the Cournot equilibrium and the price that corresponds to it. (b) Find the Lerner Index of each firm.

6. Two firms, Firm 1 and Firm 2 and are engaged in Cournot competition. The inverse demand they are facing is given by p= 50-q, with p being the price of the good, and q being total quantity demanded, given by q = 9₁ +92, where q₁ and q2 are the productions of firm 1 and 2 respectively. The total cost of firm 1 is TC1(91) = q and of firm 2 is TC2 (92) = 292. (a) Find the Cournot equilibrium and the price that corresponds to it. (b) Find the Lerner Index of each firm.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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**Practice** Consider a market with three firms. Each firm has a different cost function. We assume C1(q1) = 7q1, C2(q2) = q2 + 1, and C3(q3) = 3q3.
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Q8
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