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How To Find Cournot Equilibrium. Takes q2 as a constant. Substituting qA 76 in firm Bs reaction function enables you to solve for qB. Ask Question Asked 4 years 11 months ago. Cournot Model 10 1 1 1 2 1 1 2 1 1 1 2 1 1 1 2 2 1 FOC.
In Counots model the two are assumed to sell mineral water. We start with symmetric costs and then look at asymmetric costs and the n-firm solution. What are the firms outputs in a Nash equilibrium of Cournots model. Q d 200 P 200 80 120. Too many firms a50 b2 c2 F10 Inverse demand PQ abQ 50 2 Q demand Cost function. Online Private Tutoring at httpandreigalanchuknlFollow me on Facebook.
P 200 Q s1 Q s2 200 60 60 80.
Substituting firm Bs reaction function for qB in firm As reaction function enables you to solve for qA. What are the firms outputs in a Nash equilibrium of Cournots model. Takes the strategy of firm 2 as given ie. Takes q2 as a constant. Taking the derivative of this profit with respect to y 1 holding y 2 constant and setting the derivative equal to zero we obtain 120 2y 1 y 2 2y 1 0 or y 1 120 y 24. Q d 200 P 200 80 120.