Two firms produce the same good and compete against each other in a Cournot market. The market demand for their product is P = 204 - 4Q, and each firm has a constant marginal cost of $12 per unit. Let Q; be the output produced by firm i, where i = 1,2. Then, Firm 1's reaction function is OA. Q₁ = 24-0.5Q₂. OB. Q₁ = 25.5-0.5Q2. OC. Q₁ = 24. D. Q₁ = 24-Q₂. O E. None of the above.

Two firms produce the same good and compete against each other in a Cournot market. The market demand for their product is P = 204 - 4Q, and each firm has a constant marginal cost of $12 per unit. Let Q; be the output produced by firm i, where i = 1,2. Then, Firm 1's reaction function is OA. Q₁ = 24-0.5Q₂. OB. Q₁ = 25.5-0.5Q2. OC. Q₁ = 24. D. Q₁ = 24-Q₂. O E. None of the above.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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