#cournot

ECON 3050 – Suppose two identical Cournot duopolist

Question 6. Suppose two identical Cournot duopolist firms operate at zero marginal cost (MC=0). The market demand is p = a – bQ. Firm 1’s best-response function is A. q1 = a/2b. B. q1= a/b. C. q1= (a – bq2)/2b. D. q1= (a – 2bq2)/2b. 7. Scenario Spring Water: Suppose a stream is discovered whose water has remarkable healing powers. You decide to bottle the liquid and sell it. The market demand…