Suppose two firms A and B compete against each other in a Cournot fashion by choosing their quantities. What is the Nash Equilibrium of the game if both firms have a constant marginal cost of 2 and the price in the market is: p(qa + qB) = 20 –2(q4 + qB). O (3, 3) O (2, 2) O (4, 4) O None of the other answers are correct O (5, 5)
Suppose two firms A and B compete against each other in a Cournot fashion by choosing their quantities. What is the Nash Equilibrium of the game if both firms have a constant marginal cost of 2 and the price in the market is: p(qa + qB) = 20 –2(q4 + qB). O (3, 3) O (2, 2) O (4, 4) O None of the other answers are correct O (5, 5)
Chapter8: Game Theory
Section: Chapter Questions
Problem 8.1P
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Question
![Suppose two firms A and B compete against each other in a Cournot fashion by
choosing their quantities. What is the Nash Equilibrium of the game if both firms
have a constant marginal cost of 2 and the price in the market is:
p(qa + qB) = 20 – 2(qA + qB).
O (3, 3)
O (2, 2)
O (4, 4)
None of the other answers are correct
(5, 5)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4e45299b-98e7-4446-a187-aba55f408a1d%2Fba1f0e61-143b-4855-b645-f81bb7814343%2Fk1veou_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose two firms A and B compete against each other in a Cournot fashion by
choosing their quantities. What is the Nash Equilibrium of the game if both firms
have a constant marginal cost of 2 and the price in the market is:
p(qa + qB) = 20 – 2(qA + qB).
O (3, 3)
O (2, 2)
O (4, 4)
None of the other answers are correct
(5, 5)
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