Suppose there are two firms,Boors and Cudweiser,each selling identical-tasting nonalcoholic beer.Consumers of this beer have no brand loyalty so market demand can be expressed as P = 5 - .001(QB + QC) . Boors' marginal revenue function can be written MR = 5 - .001(2QB + QC) and symmetrically for Cudweiser. Boors operates with out-of-date technology and has constant cost of $2 per unit whereas Cudweiser has constant cost of $1 per unit. Assuming the firms behave as Cournot competitors,Boor's best-response function is
A) QB = 2,000 - .5QC
B) QB = 1,500 - .5QC
C) QC = 2,000 - .5QB
D) QC = 1,500 - .5QB
Correct Answer:
Verified
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