6. Two firms, Firm 1 and Firm 2 and are engaged in Cournot competition. The inverse demand they arefacing is given by p = 50-q, with p being the price of the good, and q being total quantity demanded,given by q = 91 +92, where 9₁ and 92 are the productions of firm 1 and 2 respectively. The total costof firm 1 is TC1(91) = q and of firm 2 is TC₂ (92) = 292.(a) Find the Cournot equilibrium and the price that corresponds to it.(b) Find the Lerner Index of each firm.

Answered: Image /qna-images/answer/4351cd91-e8f5-4a5a-afce-f605b073f605.jpg

6. Two firms, Firm 1 and Firm 2 and are engaged in Cournot competition. The inverse demand they are facing is given by p= 50-q, with p being the price of the good, and q being total quantity demanded, given by q = 9₁ +92, where q₁ and q2 are the productions of firm 1 and 2 respectively. The total cost of firm 1 is TC1(91) = q and of firm 2 is TC2 (92) = 292. (a) Find the Cournot equilibrium and the price that corresponds to it. (b) Find the Lerner Index of each firm.

6. Two firms, Firm 1 and Firm 2 and are engaged in Cournot competition. The inverse demand they are facing is given by p= 50-q, with p being the price of the good, and q being total quantity demanded, given by q = 9₁ +92, where q₁ and q2 are the productions of firm 1 and 2 respectively. The total cost of firm 1 is TC1(91) = q and of firm 2 is TC2 (92) = 292. (a) Find the Cournot equilibrium and the price that corresponds to it. (b) Find the Lerner Index of each firm.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.3P

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