Two companies (A and B) are duopolists that produce identical products. Demand for the products is given by the following demand function:
P = 10,000 - Q_A- Q_B
where Q_A and Q_B are the quantities sold by the respective firms and P is the selling price.Total cost functions for the two companies are:
TC_A = 500,000 + 200Q_A + .5Q_A²
TC_B = 200,000 + 400Q_B + Q_B²
Assume that the two firms act independently as in the Cournot model (that is, each firm assumes that the other firm's output will not change). Determine the long-run equilibrium output and selling price for each firm.

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The Answer of Two companies (A and B) are duopolists that produce identical products. Demand for the products is given by the following demand function: P = 10,000 - Q_A- Q_B where Q_A and Q_B are the quantities sold by the respective firms and P is the selling price.Total cost functions for the two companies are: TC_A = 500,000 + 200Q_A + .5Q_A² TC_B = 200,000 + 400Q_B + Q_B² Assume that the two firms act independently as in the Cournot model (that is, each firm assumes that the other firm's output will not change). Determine the long-run equilibrium output and selling price for each firm.

Two Companies (A and B) Are Duopolists That Produce Identical