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Homework answers / question archive / Consider two Cournot duopolists who face the market demand Q = 250 - P
Consider two Cournot duopolists who face the market demand Q = 250 - P. Both have constant marginal and average cost MC = AC = 10. Suppose firm l's best response function is q1 and firm 2's is q2 = 240-91 a. Find the Cournot-Nash equilibrium quantities, price and profits of each firm. b. Is this outcome efficient? Why? c. Explain the principal difference between the Cournot model of duopoly and the Stackelberg model. 2
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