Suppose the market demand function facing two firms, Firm A and Firm B, is Q=610- 2P. Each firm has a constant marginal

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Suppose The Market Demand Function Facing Two Firms Firm A And Firm B Is Q 610 2p Each Firm Has A Constant Marginal 1 (119.64 KiB) Viewed 31 times

Suppose the market demand function facing two firms, Firm A and Firm B, is Q=610- 2P. Each firm has a constant marginal cost of $5 per unit. a A. What is the best response function for Firm A? B. What is the best response function for Firm B? C. What is the Nash-Cournot equilibrium quantity produced by each firm? D. What is the market equilibrium quantity and price? E. Suppose the two firms want to initiate a merger, making it a monopoly. Assuming the same demand function and marginal cost, would this be good or bad for society and why? Must show work to support your answer. (hint: use a graph and compare the DWL's under each scenario)