In: Economics
Zack and Andon compete in the peanut market. Zack is very efficient at producing nuts, with a low marginal cost cZ = 1; Andon, however, has a constant marginal cost cA = 10. If the market demand for nuts is P = 100 - Q,
(a) Find the Cournot equilibrium profit level for Zack.
(b) Find the Cournot equilibrium profit level for Andon.