Two identical firms compete as a Cournot duopoly. The inverse market demand they face is P-128 - 4Q. The total cost function for each firm is TC(Q;)=8Q; where i is firm 1 or firm 2. Based on this information firm 1 and 2's best response functions are Q₁16-0.25Q₂ and Q2-16-0.25Q1. Q₁16-0.5Q₂ and Q2-16-0.5Q₁- Q1-15-0.25Q2 and Q2=15-0.25Q1. Q₁15-0.5Q2 and Q2 = 15-0.5Q₁.

Two identical firms compete as a Cournot duopoly. The inverse market demand they face is P-128 - 4Q. The total cost function for each firm is TC(Q;)=8Q; where i is firm 1 or firm 2. Based on this information firm 1 and 2's best response functions are Q₁16-0.25Q₂ and Q2-16-0.25Q1. Q₁16-0.5Q₂ and Q2-16-0.5Q₁- Q1-15-0.25Q2 and Q2=15-0.25Q1. Q₁15-0.5Q2 and Q2 = 15-0.5Q₁.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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