Assume that the firms act independently as in the cournot, Ask an Expert

Economics

Assume the two companies (C and D) are duopolists that produce identical products. Demand for the products is give by the following linear demand function:

P = 600-Qc-Qd

where Qc and Qd are the quantities sold by respective firms and P is the selling price. Total cost functions for the two companies are:

TCc = 25,000+100Qc
TCd = 20,000 + 125Qd

Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm's output will not change).

a) Determine the long-run equilibrium output and selling price for each firm

b) Determine the total profits for each firm at the equilibrium output found in part a.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M967958

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