Re: sample ques 2010 eco

Posted by priyanka p on Apr 25, 2010; 1:46pm
URL: http://discussion-forum.276.s1.nabble.com/sample-ques-2010-eco-tp4941379p4958437.html

question ----      Consider a market with 2 firms. cost fn of each firm is c(q)= mq where q> or=0  let the inverse dd fns of firm 1 and firm 2 be p1=a-q1-sq2 and p2=a-q2-sq1 respectively (a) find the cournot equilibrium quantities of 2 firms.     (b) using the inverse dd fns p1 and p2, derive direct dd fns D1(p1,p2) and D2(p1,p2) of firms 1 and 2.    (c) using the inverse dd fns D1(p1,p2) and D2(p1,p2), find the bertrand equilibrium prices.                                                                                                                                                                                                                                                       i have solved and i get the answers as follows, pls check !!                                     (a)   q1=q2=(a-m)/(s+2)        (b) D1=p2-p1+ (a-m)/(s+2)     and D2= p1-p2+(a-m)/(s+2) (c)  p1=p2= {(a-m)/(s+2)} -m