Find the profit maximization level of output for both firms

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Reference no: EM13985963

There are only 2 firms in a market facing same demand curve as follows:

Q = 120 – 10P

The marginal cost of each firm are, respectively,

MC1 = 4 + 0.2 Q1 and MC2 = 4 + 0.2 Q2

a) Find the profit maximization level of output for both firms.

b) Which firm is more vulnerable in case of aggressive price war between these two firms? Why?

Reference no: EM13985963

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