g (Asymmetric Cournot Duopoly) Consider a Cournot duopoly model with price function 푝푝(푄푄)= 100−푄푄, where 푄푄=푞푞1+푞푞2 is the tota
l production quantity. Two firms have different unit product costs: 푐푐1= 20 ,푐푐2= 30. a.Write down this game in normal-form representation.b.What is Firm 1’s best response if Firm 2’s quantity is 푞푞2? What is Firm 2’s best response if Firm 1’s quantity is 푞푞1? c.Find the Nash equilibrium.
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Answer for the question:
g (Asymmetric Cournot Duopoly) Consider a Cournot duopoly model with price function 푝푝(푄푄)= 100−푄푄, where 푄푄=푞푞1+푞푞2 is the total production quantity. Two firms have different unit product costs: 푐푐1= 20 ,푐푐2= 30. a.Write down this game in normal-form representation.b.What is Firm 1’s best response if Firm 2’s quantity is 푞푞2? What is Firm 2’s best response if Firm 1’s quantity is 푞푞1? c.Find the Nash equilibrium.
is given in the attachment.
Explanation:
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Answer:
Incremental B/C = 0.72
∴ 0.7, East should be constructed
Explanation:
See workings attached
