Two identical firms have mc 1 no fc and face a market, Ask an Expert

Economics

Two identical firms have MC = $1 (no FC) and face a market demand of: P = 6 - Q.

a)Cournot Duopoly: Each firm chooses a discrete quantity: 0, 1, 2, or 3. Present the game in matrix form, and find its pure strategy Nash equilibria. Are there any dominant or dominated strategies for either player?

b)Bertrand Duopoly: Each firm can choose any price. What is/are the Nash equilibrium/a?

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Macroeconomics, Economics

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