Which firm do you expect to produce more

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Reference no: EM1362235

(i) An industry has two firms. Firm 1's cost function is c(y) = 2y + 500 and firm 2's cost function is c(y) = 2y + 400. The demand curve for the output of this industry is a downward-sloping straight line.

a) In a Cournot equilibrium, where both firms produce positive amounts of output, which firm do you expect to produce more? Explain your answer.

Reference no: EM1362235

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