Consider the Cournot duopoly with linear demand function ? = 2000 − 2Q, where P is the price and Q = q1 + q2 is the total supply. Firm 1 and firm 2 has constant marginal cost of 600. Just answer the E, F and G, thank you bartleby! a. If firm compete in price, draw in detail the best response of each firm. b. Determine and explain the Bertrand equilibrium. c. What is the equilibrium quantity and how much profit for each firm? d. Explain the Bertrand Paradox in (c)! e. If firm 1 has capacity of production 450 and firm 2 has capacity of 200. Determine the Bertrand equilibrium. f. What is the equilibrium quantity, and how much profit for each firm? g. Is there any paradox in (f)?

Consider the Cournot duopoly with linear demand function ? = 2000 − 2Q, where P is the price and Q = q1 + q2 is the total supply. Firm 1 and firm 2 has constant marginal cost of 600. Just answer the E, F and G, thank you bartleby! a. If firm compete in price, draw in detail the best response of each firm. b. Determine and explain the Bertrand equilibrium. c. What is the equilibrium quantity and how much profit for each firm? d. Explain the Bertrand Paradox in (c)! e. If firm 1 has capacity of production 450 and firm 2 has capacity of 200. Determine the Bertrand equilibrium. f. What is the equilibrium quantity, and how much profit for each firm? g. Is there any paradox in (f)?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.4P

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