2), Airbus and Boeing, in the market. Each firm’s cost is MC=AC=20. The market demand is Q=100-(1/2) P. Both firms simultaneously select quantities. a) Find each firm’s reaction function. b) Find a pure Cournot Nash Equilibrium (NE). Show the market quantity and price (Q and P), each firm’s quantity and profit (qi and I, i=Airbus, Boeing), producer surplus (PS) and consumer surplus (CS) in the NE.

2), Airbus and Boeing, in the market. Each firm’s cost is MC=AC=20. The market demand is Q=100-(1/2) P. Both firms simultaneously select quantities. a) Find each firm’s reaction function. b) Find a pure Cournot Nash Equilibrium (NE). Show the market quantity and price (Q and P), each firm’s quantity and profit (qi and I, i=Airbus, Boeing), producer surplus (PS) and consumer surplus (CS) in the NE.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.3P

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