Discussion:
Suppose duopolists in the market for spring water share a market demand curve given by P = 50 - 0.02Q, where P is the price per gallon and Q is thousands of gallons of water per day. The marginal cost of producing water is assumed to be zero (0) for both firms.
If firm A produces zero gallons of water per day, firm B's best response is producing:
Optimal output for Cournot duopolists moving simultaneously is
If one firm acts as a first mover, the second firm will produce