Analysts have estimated the inverse market demand in a homogeneous-product Cournot duopoly to be P= 150 −3 (Q1 + Q2).They estimate costs to be C₁(Q1) = 18 Q1 and C2(Q2) = 30 Q2.a. Determine the reaction function for each firm.Firm 1: Q10.5 Q20.5 Q1Firm 2: Q2b. Calculate each firm's equilibrium output.Firm 1:Firm 2:c. Calculate the equilibrium market price.$d. Calculate the profit each firm earns in equilibrium.Firm 1: $Firm 2: $

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Analysts have estimated the inverse market demand in a homogeneous-product Cournot duopoly to be P= 150 −3 (Q1 + Q2). They estimate costs to be G₁(Q1) = 18 Q1 and C2(Q2) = 30 Q2. a. Determine the reaction function for each firm. Firm 1: Q₁ = 0.5 Q2 0.5 Q1 Firm 2: Q2 b. Calculate each firm's equilibrium output. Firm 1: Firm 2: c. Calculate the equilibrium market price. $ d. Calculate the profit each firm earns in equilibrium. Firm 1: $ Firm 2: $

Analysts have estimated the inverse market demand in a homogeneous-product Cournot duopoly to be P= 150 −3 (Q1 + Q2). They estimate costs to be G₁(Q1) = 18 Q1 and C2(Q2) = 30 Q2. a. Determine the reaction function for each firm. Firm 1: Q₁ = 0.5 Q2 0.5 Q1 Firm 2: Q2 b. Calculate each firm's equilibrium output. Firm 1: Firm 2: c. Calculate the equilibrium market price. $ d. Calculate the profit each firm earns in equilibrium. Firm 1: $ Firm 2: $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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