Suppose there are two firms in the market. Firm 1 and 2's marginal costs are 2 and 4, respectively. The market demand cu
Posted: Sun May 29, 2022 7:15 pm
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.
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.