Ji Consider a Cournot game with two firms. The market inverse demand function is given by P(Q) = 120-Q, and q₁ is the quantity produced by firm i. Each firm's total cost is quadratic, given by C1 (91) = q and C2 (92) = 92 respectively. Determine the Nash equilibrium, and compute the associated payoffs. 91= 16 92= 8 P*=$ 96 T1=$ 640 π2=$ 448 Now suppose that the two firms in a duopoly are permitted to explicitly collude by forming binding agreements with one another. The market inverse demand function is given by P(Q) = 120-Q, and q is the quantity produced by firm i. Each firm's total cost is quadratic, given by C1 (91) = q and C2 (92) = 92, respectively. Determine the quantities which the firms would agree upon, and compute the associated payoffs. Hint: if they collude, they act like as one firm with two plants. 91 92 P* = $ T1=

Ji Consider a Cournot game with two firms. The market inverse demand function is given by P(Q) = 120-Q, and q₁ is the quantity produced by firm i. Each firm's total cost is quadratic, given by C1 (91) = q and C2 (92) = 92 respectively. Determine the Nash equilibrium, and compute the associated payoffs. 91= 16 92= 8 P=$ 96 T1=$ 640 π2=$ 448 Now suppose that the two firms in a duopoly are permitted to explicitly collude by forming binding agreements with one another. The market inverse demand function is given by P(Q) = 120-Q, and q is the quantity produced by firm i. Each firm's total cost is quadratic, given by C1 (91) = q and C2 (92) = 92, respectively. Determine the quantities which the firms would agree upon, and compute the associated payoffs. Hint: if they collude, they act like as one firm with two plants. 91 92 P = $ T1=

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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