Consider two firms competing in a Cournot fashion. Each firm has MC=10 and the market demand is given by P=100-Q, where Q is the total market output. What is firm 1's Response function? a. q1=45-.5q2 b. q1=30 c. q2=45-.5q1 d. firm 1 will set p=MC

Consider two firms competing in a Cournot fashion. Each firm has MC=10 and the market demand is given by P=100-Q, where Q is the total market output. What is firm 1's Response function? a. q1=45-.5q2 b. q1=30 c. q2=45-.5q1 d. firm 1 will set p=MC

Survey of Economics (MindTap Course List)

9th Edition

ISBN:9781305260948

Author:Irvin B. Tucker

Publisher:Irvin B. Tucker

Chapter9: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 19SQ

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Question

Q4.

Consider two firms competing in a Cournot fashion. Each firm has MC=10 and the market demand is given by P=100-Q, where Q is the total market output. What is firm 1's Response function?

a. q1=45-.5q2

b. q1=30

c. q2=45-.5q1

d. firm 1 will set p=MC

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