Market Demand Curve in the Widgets Industry Questions

Question Description

you need to read the 2 questions in the files , and answer it and give me the the problem solving steps

[6 points) In the Cournot Duopoly model, let the best response functions of the two firms, A and B, be as follows, where Qa and Qb are the quantities each firm produces: Firm A, Qa=30 – Qb/2 Firm B, Qb = 30 – Qa/2 Find the Nash equilibrium quantities for this duopoly model. This problem normally starts with a market demand curve and asks you to determine the best responses, then find the equilibrium. You are only being asked the second part of the problem here.

I want exact numerical solutions, but if you do not want to do the algebra to find this, you could graph the best response functions carefully and see if you can guess the answer, and then plug your guess into the functions to see if it works. 4. [4 points) Let the market demand curve in the widgets industry be P = 70-Q, and let the production function be such that the average cost and marginal cost are constant at $10. a. What will the market quantity and price be in equilibrium if the widgets industry is perfectly competitive? b. What will the market quantity and price be in equilibrium if the widgets industry is pure monopoly?

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