Two rival companies offer music and video streaming services that are perfect substitutes. The service is sold over the web as a download, so the marginal cost is zero. The demand for the software is Q = 400 - P. Assume that these firms are Cournot duopolists. Derive the reaction functions for the two firms, the amount of services each will produce, and the market price that will be charged.

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The Answer of Two rival companies offer music and video streaming services that are perfect substitutes. The service is sold over the web as a download, so the marginal cost is zero. The demand for the software is Q = 400 - P. Assume that these firms are Cournot duopolists. Derive the reaction functions for the two firms, the amount of services each will produce, and the market price that will be charged.

Two Rival Companies Offer Music and Video Streaming Services That