In: Economics

# Suppose two firms, "A" and "B," form a duopoly in the market for a special type...

##### 5. In a duopoly market with two identical firms, the market demand curve is: P=50-2Q And...
5. In a duopoly market with two identical firms, the market demand curve is: P=50-2Q And the marginal cost and average cost of each firm is constant: AC=MC=2 a. Solve for firm 1’s reaction curve and graph b. Solve for firm 2’s reaction curve and graph c. Solve for each firm’s Q and P in a cournot equilibrium and show on your graph i. What is the profit for each firm? 6. Now assume the same market demand curve as...
##### Problem 1: Consider the following Bertrand duopoly: two firms (A and B) are operating in a...
Problem 1: Consider the following Bertrand duopoly: two firms (A and B) are operating in a market where they produce identical products and compete on price. Assume that the market demand can be written as ? = 50 − ?. Assume that neither firm is capacity constrained so that either firm can satisfy the market demand at any price. Suppose further that the profit function for each firm can be written as ? = ?? − ?? = (? −...