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QID: #2897
Solution for QID #2897: 1)he inverse market demand in a homogeneous product Cournot | StudyHelpMe
1)he 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 1s monopoly output and price?
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