ove figure shows the reaction functions for two pizza shops in a small isolated town. Identify the Cournot equilibrium point. What is the level of output that will be produced in collusion? What output will correspond to a perfect competitive outcome? Explain if Firm B producing 100 pizzas and firm A pro

ENGR.ECONOMIC ANALYSIS
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The above figure shows the reaction functions for two pizza shops in a small isolated town.

Identify the Cournot equilibrium point.

What is the level of output that will be produced in collusion?

What output will correspond to a perfect competitive outcome?

Explain if Firm B producing 100 pizzas and firm A producing 50 pizzas will correspond to a Cournot equilibrium. 

GA
200-
100-
66.7
50- a
B's best response
50 100
66.7
A's best response
200
Qp
Transcribed Image Text:GA 200- 100- 66.7 50- a B's best response 50 100 66.7 A's best response 200 Qp
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