Suppose that two identical firms produce widgets and that they are the only firms in the market. Their costs are given by C₁ = 60Q₁ and C₂ = 60Q2, where Q₁ is the output of Firm 1 and Q₂ is the output of Firm 2. Price is determined by the following demand curve: P=300-Q where Q=Q₁ +Q₂. Find the Cournot-Nash equilibrium. Calculate the profit of each firm at this equilibrium. (For all of the following, enter a numeric response rounded to two decimal places.) When competing, each firm will produce units of output.

Suppose that two identical firms produce widgets and that they are the only firms in the market. Their costs are given by C₁ = 60Q₁ and C₂ = 60Q2, where Q₁ is the output of Firm 1 and Q₂ is the output of Firm 2. Price is determined by the following demand curve: P=300-Q where Q=Q₁ +Q₂. Find the Cournot-Nash equilibrium. Calculate the profit of each firm at this equilibrium. (For all of the following, enter a numeric response rounded to two decimal places.) When competing, each firm will produce units of output.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.4P

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