Calculate the cournot-nash equilibrium outputs of steel

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Assume that two firms produce steel. Inverse demand function for steel is given by P = 1 Q. Marginal cost, c, is the same for each firm and
equal 0 for simplicity.

(a) Calculate the Cournot-Nash equilibrium outputs of steel for each firm.

(b) Assume that firm #1 is the Leader. For this firm, calculate von Stackelberg profit maximizing level of output. Calculate the market price in von Stackelberg equilibrium and compare it to the Cournot-Nash equilibrium price.

Reference no: EM13244958

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