The weekly demand for beer

Reference no: EM13686069

The weekly demand for beer (by the keg, which is equivalent to 165 12-ounce bottles) in small, isolated Hoptown is:

P = 1000-2Q.

There is a duopoly of beer producers, Biller and Moors, who produce identical hoppy ales, and each have marginal costs of $100 per keg. Assume there are no fixed costs.
a. What are the best response curves in Cournot Oligopoly for these two producers?
b. What is the Nash equilibrium Q?
c. If Biller has the opportunity to be a Stackelberg leader and make its output decision before Moors, how much will each of the companies produce?
d. What is the difference in combined profits in the Stackelberg vs. simultaneous Cournot outcome?

Reference no: EM13686069

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