(Answered) The cournot model with two companies that produce

Management Studies

The Cournot model with two companies that produce homogenous good, Company A and Company B. The market demand is given as P = 40 - Q, P = price, Q = total (aggregate) quantity. The MC (marginal Cost) of Company A equals to $2 and constant. The MC (marginal cost) of Company B equals to $4 and constant. Companies have no fixed cost.

a) What is equilibrium quantities.

b) What is equilibrium profits.

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