Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function: P = 600 – Qc - Qp where Qc and Op are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TCc = 25,000 + 100Qc TCp = 20,000 + 125QD Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm's output will not change). For Company C, the long-run equilibrium output is , and the selling price is For Company D, the long-run equilibrium output is , and the selling price is $ At the equilibrium output, Company C earns total profits of $ |, and Company D earns total profits of $

Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function: P = 600 – Qc - Qp where Qc and Op are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TCc = 25,000 + 100Qc TCp = 20,000 + 125QD Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm's output will not change). For Company C, the long-run equilibrium output is , and the selling price is For Company D, the long-run equilibrium output is , and the selling price is $ At the equilibrium output, Company C earns total profits of $ |, and Company D earns total profits of $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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