Determine the output and price under a cournot equilibrium

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Reference no: EM13238351

Consider a market for a homgeneous product with demand given by Q = 37.5 - .25P. There are two firms, each with a constant marginal cost equal to 40.

a. Determine the output and price under a cournot equilibrium.

b. Determine the output and price under a Bertrand equilibrium.

c. Show graphically the e¢ ciency gain of Cournot and Bertrand outcomes relative to monopoly.

Reference no: EM13238351

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