Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

تمرين 5

The inverse market demand in a homogeneous-product Cournot duopoly is P = 200 - 3( Q 1 + Q 2 ) and costs are C 1 ( Q 1 ) = 26 Q 1 and C 2 ( Q 2 ) = 32 Q 2.
a. Determine the reaction function for each firm.
b. Calculate each firm's equilibrium output.
c. Calculate the equilibrium market price.
d. Calculate the profit each firm earns in equilibrium.