Industrial EconomicsA market is characterised by an inverse demand curve p 6- 20 where Qis total quantity. Two firms, A and 8, are competing à la Cournot andTCA(gA) = 29, and TCe(ge) = q W Firms' profits are equal to:o a) mA = and a =(b) = and ন =O () T = and T-O (6) = 1 and - 4Successivo

Profit equals total revenue minus total costs, where revenue equals price times quantity. So,…

A market is characterised by an inverse demand curve p= 6-2Q where Qis total quantity. Two frms, A and 8, are competing à la Cournot and TCA(qA) = 2q1and TCe(ge) = q W Firms profits are equal to: o (a) T = and = O (D) = and ae = O () T = H and - O (0) - 1 and wi - 1 %3!

A market is characterised by an inverse demand curve p= 6-2Q where Qis total quantity. Two frms, A and 8, are competing à la Cournot and TCA(qA) = 2q1and TCe(ge) = q W Firms profits are equal to: o (a) T = and = O (D) = and ae = O () T = H and - O (0) - 1 and wi - 1 %3!

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Industrial Economics
A market is characterised by an inverse demand curve p 6- 20 where Qis total quantity. Two firms, A and 8, are competing à la Cournot and
TCA(gA) = 29, and TCe(ge) = q W Firms' profits are equal to:
o a) mA = and a =
(b) = and ন =
O () T = and T-
O (6) = 1 and - 4
Successivo

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Step 1: Construct the Profit functions

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Step 2: Maximize the two profit functions to fund the optimal quantities

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Step 3: Solve the two equations to obtain optimal quantity

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Step 4: Use optimal quantities to calculate profits

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