question archive The inverse market demand in a homogeneous product Cournot duopoly is P=100-2(Q1+Q2), and the costs are given by C(Q1) = 12Q1 and C(Q2) = 20Q2
The inverse market demand in a homogeneous product Cournot duopoly is P=100-2(Q1+Q2), and the costs are given by C(Q1) = 12Q1 and C(Q2) = 20Q2
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The inverse market demand in a homogeneous product Cournot duopoly is P=100-2(Q1+Q2), and the costs are given by C(Q1) = 12Q1 and C(Q2) = 20Q2. The implied marginal costs are $12 for firm 1 and $20 for firm 2. (a) Determine the reaction function for firm 1. (b) Determine the reaction function for firm 2. (c) Calculate the Cournot equilibrium price and quantity. (d) Suppose firm 1 is a monopoly (firm 2 does not exist), what is firm 1's monopoly output and price? (e) How does the monopoly price and quantity comparing with Cournot equilibrium in part (c)?
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