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

Chapter12: Price And Output Determination: Oligopoly

Section: Chapter Questions

Problem 1E

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