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Cournot Duopoly

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The inverse market demand in a homogeneous product is P=100-2(Q1+Q2) and Cost are C1(Q2)=12Q1 and C2(Q2)=20Q2.

A. Determine the reaction function for each firm.

B. Calculate each firm's equilibrium output.

C. Calculate the equilibrium market price.

D. Calculate the profit each firm earns in equilibrium.

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Solution Summary

All the parts of the question regarding the firm's equilibrium output, market price and profit have been solved neatly and step-by-step in the solution.

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