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Consider a Cournot duopoly with the following inverse demand function: P = 100 - 2Q1 -
2Q2. The firms' marginal cost are identical and given by MCi(Qi) = 2Qi. Based on this
information firm 1 and 2's reaction functions are
A. r1(Q2) = 24.5 - 0.5Q1 and r2(Q1) = 24.5 - 0.5Q2.
B. r1(Q2) = 24.5 - 0.5Q2 and r1(Q2) = 24.5 - 0.5Q1.
C. Q1 = 49 - 0.5Q2 and Q2 = 49 - 0.5Q1.
D. Q1 = 49 - 0.25Q2 and Q2 = 49 - 0.25Q1.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91093048

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