Assume that two companies (C and D) are Cournot duopolists that produce identical products. Demand for the products is given by the following linear demand function: P = 600 - Qc - QD %3D where Qc and Qp are the quantities sold by the respective firms and P is the price. Total cost functions for the two companies are TC 25,000 + 100QC TC, = 20,000 + 125QD %3D a. Determine the profit functions for both firms. b. Given the cost functions, which firm will produce more in an equilibrium? c. Determine the equilibrium price and quantities sold by each firm. d Determine the profits for the market as well as each firm.

Assume that two companies (C and D) are Cournot duopolists that produce identical products. Demand for the products is given by the following linear demand function: P = 600 - Qc - QD %3D where Qc and Qp are the quantities sold by the respective firms and P is the price. Total cost functions for the two companies are TC 25,000 + 100QC TC, = 20,000 + 125QD %3D a. Determine the profit functions for both firms. b. Given the cost functions, which firm will produce more in an equilibrium? c. Determine the equilibrium price and quantities sold by each firm. d Determine the profits for the market as well as 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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