Firms A and B operate in a market with inverse demand given by p = 160 - (q_{A} + q_{B}) Their total cost functions are C_{A}(q_{A}) = q_{A} ^ 2 / 2 and C_{B}(q_{B}) = q_{B} ^ 2 / 2 , respectively. The firms compete in quantities (Cournot competition). Denote by q_{A} ^ C and q_{B} ^ C the Nash equilibrium quantities in this game. What are q_{A} ^ C and q_{B} ^ C Hint: Again, note that I gave you the total cost function for each firm, not the marginal costs. (a) q_{A} ^ C = 24 q_{B} ^ C = 24 (b) q_{A} ^ C = 60 q_{B} ^ C = 30 (c) q_{A} ^ C = 40 q_{B} ^ C = 40 (d) q_{A} ^ C = 20 q_{B} ^ C = 20 (e) q_{A} ^ C = 30 q_{B} ^ C = 30
Firms A and B operate in a market with inverse demand given by p = 160 - (q_{A} + q_{B}) Their total cost functions are C_{A}(q_{A}) = q_{A} ^ 2 / 2 and C_{B}(q_{B}) = q_{B} ^ 2 / 2 , respectively. The firms compete in quantities (Cournot competition). Denote by q_{A} ^ C and q_{B} ^ C the Nash equilibrium quantities in this game. What are q_{A} ^ C and q_{B} ^ C Hint: Again, note that I gave you the total cost function for each firm, not the marginal costs. (a) q_{A} ^ C = 24 q_{B} ^ C = 24 (b) q_{A} ^ C = 60 q_{B} ^ C = 30 (c) q_{A} ^ C = 40 q_{B} ^ C = 40 (d) q_{A} ^ C = 20 q_{B} ^ C = 20 (e) q_{A} ^ C = 30 q_{B} ^ C = 30
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Firms A and B operate in a market with inverse demand given by p = 160 - (q_{A} + q_{B}) Their total cost functions are C_{A}(q_{A}) = q_{A} ^ 2 / 2 and C_{B}(q_{B}) = q_{B} ^ 2 / 2 , respectively. The firms compete in quantities (Cournot competition). Denote by q_{A} ^ C and q_{B} ^ C the Nash equilibrium quantities in this game. What are q_{A} ^ C and q_{B} ^ C
Hint: Again, note that I gave you the total cost function for each firm, not the marginal costs.
(a) q_{A} ^ C = 24 q_{B} ^ C = 24
(b) q_{A} ^ C = 60 q_{B} ^ C = 30
(c) q_{A} ^ C = 40 q_{B} ^ C = 40
(d) q_{A} ^ C = 20 q_{B} ^ C = 20
(e) q_{A} ^ C = 30 q_{B} ^ C = 30
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