Consider a market with inverse demand P(Q) = 100 - Q

Marketing Jan 15, 2021

Consider a market with inverse demand P(Q) = 100 - Q. Assume there are two different duopolies serving it, D1 with two firms having unit costs c1 = 6 and c2 = 2, and D2 with two (symmetric) firms both having unit cost c = 4.

(a) Find the Cournot equilibrium in each duopoly.

(b) Compare the equilibrium market price and consumer surplus in the two duopolies.

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