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An industry has two firms

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0608. (i) An industry has two firms. Firm 1?s cost function is c(y) = 2y + 500 and firm 2?s cost function is c(y) = 2y + 400. The demand curve for the output of this industry is a downward-sloping straight line.;a) In a Cournot equilibrium, where both firms produce positive amounts of output, which firm do you expect to produce more? Explain your answer.

 

Paper#28581 | Written in 18-Jul-2015

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