O Conri der Hhe fallowing Cournet medel. The inverse femand function is given by p= 30-0 where Q = {, + { Fivm 1s marginal cost is $6(si=6). Finm 2 uses a p techaulayy There is no s. that it's marginal cost is $3 (6-3). fixed cort. * The two fims chore this quarti tias si multaneculy and Campete only Jome). once. (So its a one- shet simulfaneaus

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Kindly help solve part D to F. Thank you.

Consi der Hhe fallowing
» The inverse femand function is givan by p= 30-@
Cournet medel.
where Q = E,+
* Firm 13 marginal cost is $6lei=6). Fivm 2 uses a nem
techaulagy
There is no
that it's marginal cost is $3 (6=3).
fixed cort
So
The fwo fims chooce thair
and Compete only
Jame).
Answer the follming puestions.
O Derive Firm 1 amd Firm 2% vation furtions reupertivaly.
o Solve Hhe Harh equilibrium ( ", q")
O What is He equilibrinm
level for eah firm.
quenti tias simultaneculy
(So it's a
one- shot simultaneaus
once
price and what is Hhe profit
Suppore there is
Iim 2. Wlhat is the highert price that Firm I is
willing to paj for this new
o Mow let's chauge the setup from Coumet campetition
to Bertrand Competitin, while maintaining all efther
aJAump tins. What is He equilibium price?
O Suppon the fwe finms engage in Betrand (ompetition
What is the hijhut price that Fim 1 o milling
for He new feihnly?
* market for the teihue lagy uped by
to
Transcribed Image Text:Consi der Hhe fallowing » The inverse femand function is givan by p= 30-@ Cournet medel. where Q = E,+ * Firm 13 marginal cost is $6lei=6). Fivm 2 uses a nem techaulagy There is no that it's marginal cost is $3 (6=3). fixed cort So The fwo fims chooce thair and Compete only Jame). Answer the follming puestions. O Derive Firm 1 amd Firm 2% vation furtions reupertivaly. o Solve Hhe Harh equilibrium ( ", q") O What is He equilibrinm level for eah firm. quenti tias simultaneculy (So it's a one- shot simultaneaus once price and what is Hhe profit Suppore there is Iim 2. Wlhat is the highert price that Firm I is willing to paj for this new o Mow let's chauge the setup from Coumet campetition to Bertrand Competitin, while maintaining all efther aJAump tins. What is He equilibium price? O Suppon the fwe finms engage in Betrand (ompetition What is the hijhut price that Fim 1 o milling for He new feihnly? * market for the teihue lagy uped by to
Expert Solution
Introduction

According to the Cournot model of oligopoly, competitors produce a uniform product and compete for profits by selecting how much to produce. At the same time, all enterprises decide on output (quantity). The essential Cournot assumption is that each firm sets its own quantity while taking into consideration the number of its competitors. The end result is a Cournot (Nash) equilibrium, which is a Nash equilibrium in terms of quantities.

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