Question 4 Alpha Inc. and Beta Corp. compete in the market for smallgoods (processed meats). The smallgoods produced by the two firms are homogeneous, and the firms compete in Cournot (quantity) competition. Inverse demand in the market for smallgoods is given by the function, QA QB P = 100 24 24 where QA is the quantity of smaligoods produced by Alpha, and QB is the quantity of smallgoods produced by Beta. Alpha Inc.'s marginal cost is MCA = $20. and Beta Corp.'s marginal cost is MCH = $10. 4 What is Beta Corp's best-response function? Hint: Keep a record of your answer for use in later questions. QA = 1080 QA Qu = 1320 - 2 QA Q = 4320 %3D Qn = 5280 2
Question 4 Alpha Inc. and Beta Corp. compete in the market for smallgoods (processed meats). The smallgoods produced by the two firms are homogeneous, and the firms compete in Cournot (quantity) competition. Inverse demand in the market for smallgoods is given by the function, QA QB P = 100 24 24 where QA is the quantity of smaligoods produced by Alpha, and QB is the quantity of smallgoods produced by Beta. Alpha Inc.'s marginal cost is MCA = $20. and Beta Corp.'s marginal cost is MCH = $10. 4 What is Beta Corp's best-response function? Hint: Keep a record of your answer for use in later questions. QA = 1080 QA Qu = 1320 - 2 QA Q = 4320 %3D Qn = 5280 2
Chapter15: Imperfect Competition
Section: Chapter Questions
Problem 15.4P
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