Problem 2two firms A and B are competing in a Cournot duopoly. The reaction function of A is given by QA= 35-1/2QB and the reaction function of firm B is given by QB=30-1/2QA, where QA and QB represent the quantity of output produced by firm A and firm B respectively.
a. If firm A decides to produce 50 units, how many units will firm B produce?
b. If firm B decides to produce 40 units, how many units will firm A produce?
c. What quantity of output does ach firm produce in the Cournot equilibrium?
d. Sunnose the market inverse demand is P = 150- 2(QA+QB).
e. determine the price charged in this market in the Cournot equilibrium.
e. b Determine the revenue generated by each firm in the Cournot
Problem 2 Two Firms A And B Are Competing In A Cournot Duopoly The Reaction Function Of A Is Given By Qa 35 1 2qb And 1 (97.13 KiB) Viewed 9 times
Problem 2 Two Firms A And B Are Competing In A Cournot Duopoly The Reaction Function Of A Is Given By Qa 35 1 2qb And 2 (98.65 KiB) Viewed 9 times
I attached photos of the functions in case they are not clear. thank you!
iven by Q=35- Q₁ = 35-11/20₁ B and the reactio
ven by Q=35. -100 B 2 and the reaction
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