Consider a two-firm duopoly facing a linear demand curve: P = 1,600 – Q. Assume MCA = MCB = AC = 100. where: P = price Q = total output of the market, thus, Q = QA + QB Find the profit-maximizing output (Cournot equilibrium output) Find the Cournot equilibrium price of Firm A and Firm B.
Consider a two-firm duopoly facing a linear demand curve: P = 1,600 – Q. Assume MCA = MCB = AC = 100. where: P = price Q = total output of the market, thus, Q = QA + QB Find the profit-maximizing output (Cournot equilibrium output) Find the Cournot equilibrium price of Firm A and Firm B.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter12: Price And Output Determination: Oligopoly
Section: Chapter Questions
Problem 2E
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Consider a two-firm duopoly facing a linear demand curve: P = 1,600 – Q. Assume MCA = MCB = AC = 100. where: P = price
Q = total output of the market, thus, Q = QA + QB
- Find the profit-maximizing output (Cournot equilibrium output)
- Find the Cournot
equilibrium price of Firm A and Firm B.
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