Assume the market demand for carbonated water be given by QD = 200 − 5P. Assuming there are two firms (A and B) producing carbonated water, each with a constant marginal cost of $ 2. a. What is the market equilibrium price and quantity when each firm behaves as a Cournot duopolist choosing quantities? What profit does each firm earn?
Assume the market demand for carbonated water be given by QD = 200 − 5P. Assuming there are two firms (A and B) producing carbonated water, each with a constant marginal cost of $ 2. a. What is the market equilibrium price and quantity when each firm behaves as a Cournot duopolist choosing quantities? What profit does each firm earn?
Chapter15: Imperfect Competition
Section: Chapter Questions
Problem 15.4P
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1. Assume the market demand for carbonated water be given by QD = 200 − 5P. Assuming there are two firms (A and B) producing carbonated water, each with a constant marginal cost of $ 2.
a. What is the
b. What is the market equilibrium price and quantity when each firm behaves as a Bertrand duopolist choosing price? What firm profit does each firm earn now?
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