The firms in a duopoly produce differentiated products. The inverse demand for Firm 1 is p1=82-q1-0.5q2. The inverse demand for Firm 2 is p2=100-q2-0.5q1. Each firm has a marginal cost of m=$1 per unit. Solve for the Nash-Cournot equilibrium quantities. The Cournot equilibrium quantities are q1=nothing units and q2=nothing units.

Linear Algebra: A Modern Introduction
4th Edition
ISBN:9781285463247
Author:David Poole
Publisher:David Poole
Chapter2: Systems Of Linear Equations
Section2.4: Applications
Problem 23EQ: 23. Consider a simple economy with just two industries: farming and manufacturing. Farming consumes...
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The firms in a duopoly produce differentiated
products. The inverse demand for Firm 1 is
p1=82-q1-0.5q2.
The inverse demand for Firm 2 is
p2=100-q2-0.5q1.
Each firm has a marginal cost of
m=$1
per unit. Solve for the Nash-Cournot
equilibrium quantities.
The Cournot equilibrium quantities are
q1=nothing
units
and
q2=nothing
units.
Transcribed Image Text:The firms in a duopoly produce differentiated products. The inverse demand for Firm 1 is p1=82-q1-0.5q2. The inverse demand for Firm 2 is p2=100-q2-0.5q1. Each firm has a marginal cost of m=$1 per unit. Solve for the Nash-Cournot equilibrium quantities. The Cournot equilibrium quantities are q1=nothing units and q2=nothing units.
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