Two firms compete for consumers what the outcome

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Reference no: EM1319147

Q. Two firms compete for consumers who have aggregate Demand x=100-2P. Both firms have constant marginal cost, with MC1=1 also MC2 equal to some constant C>1.

a.) Using Bertrand price competition, illustrate both firms' best response functions & indicate Illustrate what the outcome is for each firms' production also profit.

b.) Using Cournot quantity completion, illustrate both firms' best response functions.

c.) Assume firm 2 moves first also firm 1 move second, as in the Stackelberg model. Illustrate what is the highest value of c such to firm 2 have more profits than firm 1?

Reference no: EM1319147

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