Unformatted text preview: deliver to Beta, Beta delivers to Alpha, Beta delivers to Beta) b) Through first order conditions, calculate the best response functions of x and y on Alpha market. c) Draw the two lines on a graph, put x on the horizontal axis and y on the vertical axis. d) Find the intersection of the two lines, ie., calculate the value for x and value for y. e) How much is the price of this device in Alpha? f) How much is the profit Alpha producer makes by deliver x units of the product to Alpha? g) How much is the profit Alpha producer makes by deliver y units of the product to Beta? h) How much is the consumer surplus in Alpha? Cournot Model...
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This note was uploaded on 10/25/2011 for the course ECONOMICS 300 taught by Professor Sani during the Spring '11 term at Rutgers.
- Spring '11
- International Economics