Homework Help is Here – Start Your Trial Now!
Business
Economics
Q1 Two firms produce a homogeneous good. The market demand is given by Q(p) = 19 - p, and the cost function is TC(q) q. (Same for both firms.) The two firms compete in the style of Cournot by simultaneously choosing their quantities. Show that the Cournot equilibrium quantities are q₁ = 6 for Firm 1 and q2 = 6 for Firm 2, so that the price in the Cournot equilibrium is P = 7.

Q1 Two firms produce a homogeneous good. The market demand is given by Q(p) = 19 - p, and the cost function is TC(q) q. (Same for both firms.) The two firms compete in the style of Cournot by simultaneously choosing their quantities. Show that the Cournot equilibrium quantities are q₁ = 6 for Firm 1 and q2 = 6 for Firm 2, so that the price in the Cournot equilibrium is P = 7.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question
Image uploaded answer is not allowed please dear expert
Q1 Two firms produce a homogeneous good. The market demand is given by Q(p) = 19 - p, and the cost function is TC(q) q. (Same for both firms.) The two firms compete in the style of Cournot by simultaneously choosing their quantities. Show that the Cournot equilibrium quantities are q₁ = 6 for Firm 1 and q2 = 6 for Firm 2, so that the price in the Cournot equilibrium is P = 7.
Transcribed Image Text:Q1 Two firms produce a homogeneous good. The market demand is given by Q(p) = 19 - p, and the cost function is TC(q) q. (Same for both firms.) The two firms compete in the style of Cournot by simultaneously choosing their quantities. Show that the Cournot equilibrium quantities are q₁ = 6 for Firm 1 and q2 = 6 for Firm 2, so that the price in the Cournot equilibrium is P = 7.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS