View the step-by-step solution to:

Suppose duopolists in the market for spring water share a market demand curve given by P = 50 0.02Q, where P is the price per gallon and Q is...

Suppose duopolists in the market for spring water share a market demand curve given by P = 50 − 0.02Q, where P is the price per gallon and Q is thousands of gallons of water per day. The marginal cost of producing water is assumed to be zero (0) for both firms.

If firm A produces zero gallons of water per day, firm B’s best response is producing:

Optimal output for Cournot duopolists moving simultaneously is

If one firm acts as a first mover, the second firm will produce
Sign up to view the entire interaction

Top Answer

The way to answer this question is ... View the full answer

8450342.doc

P= 50-.02q
MC= 0
part b
COURNOT:
P = 50 –0.02(Q1+Q2)
TR1= 50Q1-0.02Q12-.02Q1Q2
MR1= 50-0.04Q1-.02Q2
Equate this to MC1=0 and we get 50-.04Q1-.02Q2=0 as the reaction curve
For firm 2 MR2=...

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online