Homework Answers
In Cournout competiton, two players compete with each other on the amount of output they produce at the same time.
We know, Q=Qm+Qk
So, P=8-Qm-Qk
Profit of McDonald is (8-Qm-Qk)*Qm-Qm^2
By deriving and equalizing to 0, we get 8-2Qm-Qk-2Qm=0 So, Qk+4Qm=8
Profit of KFC is (8-Qm-Qk)*Qk-Qk^2/2
By deriving and equalizing to 0, we get 8-2Qk-Qm-Qk=0 So, 3Qk+Qm=8
3(8-4Qm)+Qm=8
16=11Qm
Qm=16/11(Ans)
Qk=8-64/11=24/11(Ans)
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