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Consider a Cournot duopoly. The market demand is p=190-q1-q2. Firm 1's marginal cost is 40, and firm 2's marginal cost is also 40. There are no fixed costs.A. Derive every firm's best response function.B. What is the Nash equilibrium of this model? Search the equilibrium market price.C. Find the equilibrium profit for every firm.D. Find the equilibrium consumer surplus in this market.
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Question: Extract of the Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Swiss Banking Global Symposium, Zurich, 16 November 2012
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