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Solve for the reaction function of firms

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Reference no: EM131692337

Market demand for a product is: P = 400-5Q, where Q is the total output of firm 1 and firm 2. Both firms have total cost functions of TC = 3000 + 25Q. (Assume that firms can produce fractional units)

  1. Solve for the reaction function of both firms.
  2. Solve for the Cournot equilibrium level of output, total quantity, and price.
  3. Calculate the profits for each firm.

Reference no: EM131692337

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