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# Two identical firms have: MC = \$1 and face a market demand function of: P = 6 – Q

Question # 00183229
Subject: Economics
Due on: 01/31/2016
Posted On: 01/31/2016 05:35 AM

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Two identical firms have: MC = \$1 and face a market demand function of: P = 6 – Q. Thus, total quantity, Q = q1 + q2, the sum of what each firm produces, and profit (payoff) per firm (same for both), (pi)1 = (P – MC) x q1 = [(6 – Q) – 1] x q1 = [5 – (q1 + q2)] x q1
a) Cournot Duopoly: Each firm chooses a discrete quantity: 0, 1, 2, or 3. Present the game in matrix form, and find its pure strategy Nash equilibria. Are there any dominant or dominated strategies for either player?

b) Bertrand Duopoly: Each firm can choose any price. What is/are the Nash equilibrium/a?

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#### Two identical firms have: MC = \$1 and face a market demand function of: P = 6 – Q

Tutorial # 00178033
Posted On: 01/31/2016 05:36 AM
Posted By:
shri21
Questions:
458
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460
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Tutorial Preview …Each xxxx will xxxxx at ? xxx and can xxxxxx…
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Preview: both), xxxxx = xx – MC) x q1 = xxx – xx xxx 1] x q1 = xx – (q1 x q2)] x xxxx Cournot xxxxxxxx Each firm xxxxxxx a discrete xxxxxxxxx 0, xx xx or x Present the xxxx in matrix xxxxx and.....
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