Suppose a market has two ﬁrms that sell identical products. These firms face an inverse market...

Question

Question

Suppose a market has two ﬁrms that sell identical products. These firms face an inverse market demand function of P=120 – Q. Firm 1 has a constant MC=20. Firm 2’s marginal cost is MC=30.
1. Find the Cournot equilibrium price, quantities, and proﬁts for each ﬁrm.
2. If these firms were able to perfectly collude, what would be the monopoly equilibrium?

business economics

Answer 1

Answer #1

P-120-0 = 12000,-02 MC = 20 Me=30 TIF 1200.-( 20. 0₂ - 200, - 120-20, -0₂ - 2020 (0,=1000020 DO TIL=12002 - 0 h - 0 2 - 304 a

Answer 2

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