Determine the reaction function for each firm

Reference no: EM13183814

The inverse market demand in a homogeneous-product Cournot duopoly is P = 200 - 3(Q1 + Q2) and costs are C1(Q1) = 26Q1 and C2(Q2) = 32Q2.

a. Determine the reaction function for each firm.

Firm 1: Q1 = - Q2
Firm 2: Q2 = - Q1

b. Calculate each firm's equilibrium output.

c. Calculate the equilibrium market price.

d. Calculate the profit each firm earns in equilibrium.

Reference no: EM13183814

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