Additional Problem 3: Assume two companies (C and D) are Cournot duopolists that produce identical products. Demand for the products is given by the following linear demand function: ? = 600 − ?C − ?D where ?C and ?D are the quantities sold by the respective firms and P is the price. Total cost functions for the two companies are ??C= 25,000 +100?C 2 ??D = 20,000 + 125?D c. Determine the equilibrium price and quantities sold by each firm. d.Determine the profits for the market as well as eachfirm.
Additional Problem 3: Assume two companies (C and D) are Cournot duopolists that produce identical products. Demand for the products is given by the following linear demand function: ? = 600 − ?C − ?D where ?C and ?D are the quantities sold by the respective firms and P is the price. Total cost functions for the two companies are ??C= 25,000 +100?C 2 ??D = 20,000 + 125?D c. Determine the equilibrium price and quantities sold by each firm. d.Determine the profits for the market as well as eachfirm.
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
Chapter13: best-practice Tactics: Game Theory
Section: Chapter Questions
Problem 1E
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Additional Problem 3:
Assume two companies (C and D) are Cournot duopolists that produce identical products.
Demand for the products is given by the following linear demand function:
? = 600 − ?C − ?D
where ?C and ?D are the quantities sold by the respective firms and P is the price. Total cost
functions for the two companies are
??C= 25,000 +100?C
Assume two companies (C and D) are Cournot duopolists that produce identical products.
? = 600 − ?C − ?D
where ?C and ?D are the quantities sold by the respective firms and P is the price. Total cost
functions for the two companies are
??C= 25,000 +100?C
2
??D = 20,000 + 125?D
c. Determine theequilibrium price and quantities sold by each firm.
d.Determine the profits for the market as well as eachfirm.
??D = 20,000 + 125?D
c. Determine the
d.Determine the profits for the market as well as eachfirm.
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