Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb=268-10Qb. The marginal cost for firm 1 is given by mc1= 6Q The marginal cost for firm 2 is given by mc2=4Q (Assume firm 1 has a fixed cost of $102 and firm 2 had a fixed cost of $104 What are the profits of firm 2? (hint 567.26) How much consumer surplus is created by industry transactions?
Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb=268-10Qb. The marginal cost for firm 1 is given by mc1= 6Q The marginal cost for firm 2 is given by mc2=4Q (Assume firm 1 has a fixed cost of $102 and firm 2 had a fixed cost of $104 What are the profits of firm 2? (hint 567.26) How much consumer surplus is created by industry transactions?
Chapter15: Imperfect Competition
Section: Chapter Questions
Problem 15.3P
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Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb=268-10Qb.
The marginal cost for firm 1 is given by mc1= 6Q
The marginal cost for firm 2 is given by mc2=4Q
(Assume firm 1 has a fixed cost of $102 and firm 2 had a fixed cost of $104
What are the profits of firm 2? (hint 567.26)
How much consumer surplus is created by industry transactions? (hint 1333.34)
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