Given that this is a cournot duopoly model could I have help solving Im having some trouble comprehending the steps. Please and thank you! Cournot Duopoly Modele. Generalize your result using parameters a and c:Demand and cost are: P = a – Q1- Q2TC1 =cQ1TC2 =cQ2Qi*(Q?)Qz*(Q1)%3DP1* =P2* =TR1 =TC1 =TR =TC =n =%3D A homogenous product is produced by two rival firms. They have the same costs.The market demand is:P = 80 – QP = 80 – Q1- Q2orThe firms' total cost equations are:C1 = 50Q1C2 = 50Q2a. Both firms choose their output level at the same time. In estimating its marginal revenue,each firm takes its rival's output as given and maximizes profit subject to that assumption.Write Firm 1's total revenue (= PQ1) and marginal revenue equations.TR1 =MR1 =b. Set MR1 = MC1 to derive the equation of Firm 1's reaction curve, Q1*(Q2). Also write thesymmetric reaction curve equation for Firm 2.Qi*(Q2) =Q2*(Q:) =%3Dc. Solve for the profit-maximizing price. Find the output, revenue, cost, and profit of each firm.Add the firms' revenue (TR = TR1 + TR2), cost (TC = TC; + TC2), and profit (N = N: + N2).Qi*Qz*P* =TR1 =TC =TR =TC =d. GRAPH the Cournot reaction curves. Label the Cournot equilibrium point (ECOURN). Label thepoint that shows what the firms' outputs would be if, instead, they behaved like perfectcompetitors (EPTN), and happened to each supply the same output. Finally, label the pointthat represents the firms' outputs if, instead, they colluded-behaved like a singlemonopolist-and split the profit equally (EcoLLU).II

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A homogenous product is produced by two rival firms. They have the same costs. The market demand is: P = 80 – Q P = 80 – Q1 -Q2 or The firms' total cost equations are: C1 = 50Q1 C2 = 50Q2 a. Both firms choose their output level at the same time. In estimating its marginal revenue, each firm takes its rival's output as given and maximizes profit subject to that assumption. Write Firm 1's total revenue (= PQ:) and marginal revenue equations. TR1 = MR1 = b. Set MR: = MC1 to derive the equation of Firm 1's reaction curve, Q1*(Q2). Also write the symmetric reaction curve equation for Firm 2. Q1*(Q2) = Q2*(Q!) = . c. Solve for the profit-maximizing price. Find the output, revenue, cost, and profit of each firm. Add the firms' revenue (TR = TRị + TR2), cost (TC = TC, + TC2), and profit (N = N1 + N2). Qi* Q2* = p* = %3D TR1 = TC = Ni = TR = TC = %3D

A homogenous product is produced by two rival firms. They have the same costs. The market demand is: P = 80 – Q P = 80 – Q1 -Q2 or The firms' total cost equations are: C1 = 50Q1 C2 = 50Q2 a. Both firms choose their output level at the same time. In estimating its marginal revenue, each firm takes its rival's output as given and maximizes profit subject to that assumption. Write Firm 1's total revenue (= PQ:) and marginal revenue equations. TR1 = MR1 = b. Set MR: = MC1 to derive the equation of Firm 1's reaction curve, Q1(Q2). Also write the symmetric reaction curve equation for Firm 2. Q1(Q2) = Q2(Q!) = . c. Solve for the profit-maximizing price. Find the output, revenue, cost, and profit of each firm. Add the firms' revenue (TR = TRị + TR2), cost (TC = TC, + TC2), and profit (N = N1 + N2). Qi Q2* = p* = %3D TR1 = TC = Ni = TR = TC = %3D

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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