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Unformatted text preview: market with linear demand Q=42-2P.
For parts a to c, each firm has total cost function .
a)  Suppose the firms simultaneously choose quantity and play a Nash equilibrium. Find
each firm’s quantity, the market price, and the deadweight loss.
b)  Suppose firm 1 first chooses , and then firm 2 chooses after observing . Find
the subgame-perfect equilibrium (SPE). [Note: Some fractions might get a little ugly...]
c)  Suppose firm 1 first chooses market price P, and then firm 2 chooses
after observing P. Firm 1 meets any demand a...
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This test prep was uploaded on 03/17/2014 for the course ECON 302 taught by Professor Shihenlu during the Fall '13 term at Simon Fraser.
- Fall '13