QUESTION 15 Firm 1 and Firm 2 are Cournot competitors. They have cost functions Cost1=4Q1 Cost2=4Q2 The market demand function is Q=35-0.5p Compute the Nash equilibrium of this Cournot game. In equilibrium, Firm 1 produces Q₁= ✓. The market price is p=

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
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Chapter13: best-practice Tactics: Game Theory
Section: Chapter Questions
Problem 10E
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QUESTION 15
Firm 1 and Firm 2 are Cournot competitors. They have cost functions
Cost₁=4Q1
Cost2=4Q2
The market demand function is
Q=35-0.5p
Compute the Nash equilibrium of this Cournot game.
In equilibrium, Firm 1 produces Q₁=
✓. The market price is p=
Transcribed Image Text:QUESTION 15 Firm 1 and Firm 2 are Cournot competitors. They have cost functions Cost₁=4Q1 Cost2=4Q2 The market demand function is Q=35-0.5p Compute the Nash equilibrium of this Cournot game. In equilibrium, Firm 1 produces Q₁= ✓. The market price is p=
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