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Q. Please note, this is a single question with two parts. Also, this account has a monthly subscription so I do NOT understand the statement stating I can have multiple questions answered for a $25 fee. I have to pay a monthly subscription also a separate fee per question?
Assume to two companies (A also B) are duopolists who produce identical products. Demand for the products is given by the following linear Demand function:
P = 200-Qa-Qb
where Qa also Qb are the quantities sold by the respective firms also P is the selling price. Total cost functions for the two companies are:
TCa = 1500+55Qa+Qa^2
TCb = 1200+20Qb+2Qb^2
Assume to the firms act independently as in the Cournot model (i.e., each firm assumes to the other firm's output will not change).
a) Determine the long run equilibrium output also selling price for each firm
b) Determine Firm A, Firm B also total industry profits at the equilibrium solution found in Part a.
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