I was hoping I could have some help on parts c-e of this problem I’m getting a little stuck on making sure my values are correct given this this is a cournot duopoly model. A homogenous product is produced by two rival firms. They have the same costs.The market demand is:P = 80 –-QР%3D 80— Q1 — Q2orThe firms' total cost equations are:C1 = 50Q1C2 = 50Q2a. Both firms choose their output level at the same time. In estimating its marginal revenue,each firm takes its rival's output as given and maximizes profit subject to that assumption.Write Firm 1's total revenue (= PQ1) and marginal revenue equations.TR1 =MR1 =b. Set MR1 = MC1 to derive the equation of Firm 1's reaction curve, Q1*(Q2). Also write thesymmetric reaction curve equation for Firm 2.Qi*(Q2 :%3DQz*(Q1) =c. Solve for the profit-maximizing price. Find the output, revenue, cost, and profit of each firm.Add the firms' revenue (TR = TRỊ + TR2), cost (TC = TC1 + TC2), and profit (N = N1 + N2).Qz*p* =TRỊ =TC1 =TR =TC =d. GRAPH the Cournot reaction curves. Label the Cournot equilibrium point (EcouRN). Label thepoint that shows what the firms' outputs would be if, instead, they behaved like perfectcompetitors (EPTN), and happened to each supply the same output. Finally, label the pointthat represents the firms' outputs if, instead, they colluded-behaved like a singlemonopolist-and split the profit equally (EcoLLu).II Cournot Duopoly Modele. Generalize your result using parameters a and c:Demand and cost are: P = a – Q1 – Q2TC =cQ1TC2 =CQ2Qi*(Q2) =Q2*(Q1) =Q1*Qz*P1* =P2* =TRỊ =TC =TR =TC ==

Introduction We have given a cournot duopoly market. Here are two firms in the market. Both will…

e. Generalize your result using parameters a and c: Demand and cost are: P = a - Q1 - Q2 TC1 = cQ1 TC2 = cQ2 Qi*(Q?) = Q2*(Qi) = . Q1* = Q²* P1* = P2* = TRỊ = TC1 = П TR = TC = II II

e. Generalize your result using parameters a and c: Demand and cost are: P = a - Q1 - Q2 TC1 = cQ1 TC2 = cQ2 Qi(Q?) = Q2(Qi) = . Q1* = Q²* P1* = P2* = TRỊ = TC1 = П TR = TC = II II

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter13: best-practice Tactics: Game Theory

Section: Chapter Questions

Problem 1E

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