How efficiency affects equilibrium market shares

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Two firms compete in quantities, selling identical goods, facing the demand function P(Q) = 130−q1− q2 where qi is the output level of firm i. Assume that firm 1 is more efficient than firm 2, MC1(q) = 10 and MC2(q) = 20. Find the NE quantities of this static game. Once you find equilibrium quantities, discuss how efficiency affects the location of a Best Response function, and in turn how efficiency affects equilibrium market shares

Reference no: EM13854173

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How efficiency affects equilibrium market shares : Two firms compete in quantities, selling identical goods, facing the demand function P(Q) = 130−q1− q2 where qi is the output level of firm i. Assume that firm 1 is more efficient than firm 2, MC1(q) = 10 and MC2(q) = 20. Find the NE quantities of th..

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