Question 1. Firm 1 and Firm 2 are the only two firms in a market where price is determined by the inverse demand function: P = 139 - Q. Q is the sum of Firm 1 and Firm 2's output, so Q = 91 +92 Firm 1's total cost function is given by TC₁(91) = 10q1 Firm 2's total cost function is given by TC₂(92) = 992 If these firms Cournot compete (simultaneously setting quantities), what will market price be when both firms are maximizing profits in equilibrium? (Note: The answer may not be a whole number, so round to the nearest hundredth) (Note: The numbers may change between questions, so read carefully)

Question 1. Firm 1 and Firm 2 are the only two firms in a market where price is determined by the inverse demand function: P = 139 - Q. Q is the sum of Firm 1 and Firm 2's output, so Q = 91 +92 Firm 1's total cost function is given by TC₁(91) = 10q1 Firm 2's total cost function is given by TC₂(92) = 992 If these firms Cournot compete (simultaneously setting quantities), what will market price be when both firms are maximizing profits in equilibrium? (Note: The answer may not be a whole number, so round to the nearest hundredth) (Note: The numbers may change between questions, so read carefully)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.4P

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