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The inverse market demand for mineral water is: P=200-10Q, where Q is the total market output and P is the market price. Two firms, A and B, have complete control of the supply of mineral water and both have zero costs.
Find a Cournot Solution.
find an identical output for each firm that maximizes joint profits.

Continuing with the previous problem , assume that each firm can choose only two outputs - the ones from parts a and b in problem 2. Denote these outputs qa and qb.
Compute the payoff/profit matrix showing the four possible outcomes.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M948817

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