What are the firms reaction functions

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Reference no: EM131071683

Use the following demand and marginal cost information to answer the questions:

Market Demand à P = 20 – (9/2) Q

Marginal Cost = 2

a. If an industry is a Cournot duopoly, what are the firm’s reaction functions?

b. If an industry is a Cournot duopoly, what is the equilibrium price and output? What are the profits for each firm?

c. Illustrate the firm’s pricing and output decision in a graph.

Reference no: EM131071683

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