Consider a Duopoly model, in which two firms decide a quantity simultaneously. The market demand is given by P=120 - 3Q, where Q is the total output (i.e., Q=Q1+Q2). Each firm has an identical cost function, TCi=12Qi, i=1, 2. If Firm 1 believes Q2=12, Firm 1 should sell Q1= _____ units in order to maximize its profit.

Consider a Duopoly model, in which two firms decide a quantity simultaneously. The market demand is given by P=120 - 3Q, where Q is the total output (i.e., Q=Q1+Q2). Each firm has an identical cost function, TCi=12Qi, i=1, 2. If Firm 1 believes Q2=12, Firm 1 should sell Q1= _____ units in order to maximize its profit.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter10: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 9SQP

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