7. Two firms are competing in a market where the model of competition is Cournot. The inverse demand function is given by p(Q) = 8 – Q/2, where Q qi + q2. There are no fixed costs and the marginal costs of the firms are given by: MC1 = 4, MC2 = 12. What is the equilibrium price in this market? (а) 5 (b) 6 (c) 7 (d) 8 (e) 9

7. Two firms are competing in a market where the model of competition is Cournot. The inverse demand function is given by p(Q) = 8 – Q/2, where Q qi + q2. There are no fixed costs and the marginal costs of the firms are given by: MC1 = 4, MC2 = 12. What is the equilibrium price in this market? (а) 5 (b) 6 (c) 7 (d) 8 (e) 9

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter24: Price-searcher Markets With High Entry Barriers

Section: Chapter Questions

Problem 7CQ

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