Suppose that the market demand for a certain product is given by P = 370 – 2Q, where Q is total industry output. There are only two firms F1, F2 that manufacture that product. The two firms have the following marginal costs: c1 = 24 and cg - 26. a) Determine the output levels that will be produced in a Cournot-Nash equilibrium 92 = the price level in such an equilibrium P= and the profit levels b) Determine the output levels that will be produced in a Stackelberg-Nash equilibrium (consider Fj is the leader and F2 is the follower) the price level in such an equilibrium ps- and the profit levels

Suppose that the market demand for a certain product is given by P = 370 – 2Q, where Q is total industry output. There are only two firms F1, F2 that manufacture that product. The two firms have the following marginal costs: c1 = 24 and cg - 26. a) Determine the output levels that will be produced in a Cournot-Nash equilibrium 92 = the price level in such an equilibrium P= and the profit levels b) Determine the output levels that will be produced in a Stackelberg-Nash equilibrium (consider Fj is the leader and F2 is the follower) the price level in such an equilibrium ps- and the profit levels

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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