Cournot Duopoly - Reaction Functions
Starting with the reaction functions of duopolists A and B from Problem 4, find the Cournot solution algebraically.
Given the reaction function of duopolist A, QA = (12-QB)/2 (1) and the reaction function of duopolist B, QB= (12-QA)/2 (2), find the Cournot solution , that is to find QA and QB by substituting (1) into (2).
Solution Preview
QA = (12 - QB)/2
Substitute QB = (12 - QA)/2 into the above ...
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