Suppose there are two firms in the market. Firm 1 and 2's marginal costs are 2 and 4, respectively. The market demand cu

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answerhappygod
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Suppose there are two firms in the market. Firm 1 and 2's marginal costs are 2 and 4, respectively. The market demand cu

Post by answerhappygod »

Suppose there are two firms in the market. Firm 1 and 2's
marginal costs are 2 and 4, respectively. The market demand curve
is P=30-Q.
Suppose the firms compete à la Cournot.
(a) Derive firm 1 and 2's reaction curves.
(b) Compute the Cournot equilibrium, and the equilibrium market
price.
Now suppose the firms compete à la Bertrand.
(c) Compute the Bertrand equilibrium. Explain why you have such
a result.
Could write clear and with an explanation, please
Thank you.
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