Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function: P=1000−QC−QD where QC and QD are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TCC=15,000+50QC TCD=10,000+75QD Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm’s output will not change). Please, find the equilibrium output of firm C.
Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function: P=1000−QC−QD where QC and QD are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TCC=15,000+50QC TCD=10,000+75QD Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm’s output will not change). Please, find the equilibrium output of firm C.
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
Related questions
Question
- Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function:
P=1000−QC−QD
where QC and QD are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are
- TCC=15,000+50QC
- TCD=10,000+75QD
Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm’s output will not change). Please, find the equilibrium output of firm C.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning