Suppose that there are two firms firm a and firm b in the, Ask an Expert

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Suppose that there are two firms (Firm A and Firm B) in the market for frozen rounded articulate condiments (FRAC). Also assume that the market demand for FRAC is given by P= 15-Q where Q is the total quantity in the market from the two firms. LAstly, assume both firms have zero fixed cost and that Firm A has a constant marginal cost of $1 per unit that firm b has constant marginal cost of $3 per unit.

A. Find the cournot equilibrium quantities for each firm. Also find the market price of the good.

B. Now assume that firm a chooses its quantity first then firm b chooses. Find the stackelberg equilibrium quantities and profits for each firm.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92197025

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