Homework answers / question archive /   Will Upvote!-Cournot duopoly: Consider a Cournot duopoly, where each firm has marginal cost MC = 40, and the market demand is Q = 200 − ( 1 /2 ) p

  Will Upvote!-Cournot duopoly: Consider a Cournot duopoly, where each firm has marginal cost MC = 40, and the market demand is Q = 200 − ( 1 /2 ) p

Economics

Share With

Will Upvote!-Cournot duopoly:

Consider a Cournot duopoly, where each firm has marginal cost MC = 40, and the market demand is Q = 200 − ( 1 /2 ) p.

a) What are the best-response functions of each firm? (2 marks)

b) What is the equilibrium output level for each firm? (1 mark)

c) How does the total output level compare to the cartel (collusive) output level?