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Suppose that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function:
P=600-Qc-Qd
Where Qc and Qd are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are
TCc=25,000 + 100QcTCd=20,000 + 125Qd
Assume that the firms act independently as in the Courtnot model(ie, each firm assumes that the other firm's output will not change).
a.) Determine the long equilibrium output and the selling price of each firm.b.) Determine the total profits for each firm at the equilibrium output found in part (a).
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