Alex owns a mineral water spring that provides him with an unlimited supply of water at no cost. He can bottle the water at a cost of $2 per litre. Alex's neighbour, Scrooge, found a mineral spring of his own, that provides him with the same water quality as that of Alex. It also costs him $2 per litre to get his water out of the ground and bottle it. The inverse demand curve for mineral water is given by P(Q)=20−0.2Q, where P is the price per litre and Q is the number of litres sold. How many litres will each of them sell in the Cournot equilibrium?

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Chapter1: Making Economics Decisions
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Alex owns a mineral water spring that provides him with an unlimited supply of water at no cost. He can bottle the water at a cost of $2 per litre.

Alex's neighbour, Scrooge, found a mineral spring of his own, that provides him with the same water quality as that of Alex. It also costs him $2 per litre to get his water out of the ground and bottle it.

The inverse demand curve for mineral water is given by P(Q)=20−0.2Q, where P is the price per litre and Q is the number of litres sold.

How many litres will each of them sell in the Cournot equilibrium? 

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