Re: Cournot Oligopoly Questions!!!!

Posted by madhur1987 on May 28, 2013; 4:59pm
URL: http://discussion-forum.276.s1.nabble.com/Cournot-Oligopoly-Questions-tp7581233p7581405.html

consider 2 firms facing dd curve P=50-5q where q =q1+q2. the firm cost fns are C1=20+10q1 and C2=10+12q2
a)suppose that both firms have entered the industry what is the join profit maximizing level of output?how much will each firm produce?how would your ans change if the firms have not yet entered the industry?
b)how much should firm1 be willing to pay to purchase firm 2 if collusion is illegal but a takeover is not?
in a part how will we decide that which firm will produce how much?