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What is the equilibrium price

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Reference no: EM131426813

Two identical firms have the cost function C(q) = 100 + q2 They face the demand function: P = 40 - Q

(a) You are told that in equilibrium, both firms are making zero profits. What is the equilibrium price?

(b) Now suppose Firm 1 decides to force Firm 2 out of the market. To do this, Firm 1 decides to drive the price down to $10. How much higher will Firm 1's losses be compared to Firm 2's losses?

Reference no: EM131426813

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