Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb = 530 - 17 Qb.The marginal cost for firm 1 is given by mc1 = 12 Q.The marginal cost for firm 2 is given by mc2 = 9 Q. (Assume firm 1 has a fixed cost of $ 157 and firm 2 has a fixed cost of $ 113 .) How much DWL does the duopoly cause ? Answer: 500.67
Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb = 530 - 17 Qb.The marginal cost for firm 1 is given by mc1 = 12 Q.The marginal cost for firm 2 is given by mc2 = 9 Q. (Assume firm 1 has a fixed cost of $ 157 and firm 2 has a fixed cost of $ 113 .) How much DWL does the duopoly cause ? Answer: 500.67
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider a Cournot duopoly, the firms face an (inverse)
The marginal cost for firm 1 is given by mc1 = 12 Q.
The marginal cost for firm 2 is given by mc2 = 9 Q.
(Assume firm 1 has a fixed cost of $ 157 and firm 2 has a fixed cost of $ 113 .)
How much DWL does the duopoly cause ? Answer: 500.67
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