Determine the long-run equilibrium output

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Assume 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

2271_f4cabdcc-da42-43f1-a731-805c74290ab4.png

Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm's output will not change).

a. Determine the long-run equilibrium output and selling price for each firm.

b. Determine the total profits for each firm at the equilibrium output found in Part (a).

Reference no: EM131347056

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