Re: DSE 2013 Paper Discussion

Posted by kangkan on May 19, 2014; 7:11am
URL: http://discussion-forum.276.s1.nabble.com/DSE-2013-Paper-Discussion-tp7584703p7590154.html

Hi Neha..for 7th..you have to solve it as cournot equilibrium of two firms..after doing all the algebra ,you will get p= a+c-b^2*c/(2+b)(1-b)..now you have to assume that b is so small that b^2 can be ignored.the above expression simplifies to a+c/2-b which is option a i tink.

For the second one,its maimaztion of profit for a single monopolist...differentiate with respect to q1 and q2...you will get q1 =q2....use this in the expression for price..the option will be c