How much does each firm produce if they play cournot game

Reference no: EM133494834

Problem

Market demand is Q=100-P. There are two firms, Firm A and Firm B. Assume that each firm's marginal cost of production is 5.

Question 1. How much does each firm produce if they play Cournot game? What are the price and profits?

Question 2. How much does each firm produce if they form a cartel and jointly maximize their profits? What are the price and profits?

Question 3. Calculate the competitive equilibrium production, price, and profits, when Firms A and B act perfectly competitively?

Question 4. Rank the prices and outputs in questions 1-3 above.

Reference no: EM133494834

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