Two firms a and b are engaged in a cournot quantity


1. Two firms, A and B, are engaged in a Cournot quantity competition game. They choose their respective quantities, for firm A and for firm B, simultaneously and independently. The market demand is It is known that firm A's reaction function is given by and firm B's reaction function is . Answer the following questions based on the above description:

(a) If firm B produces at a level of 4, firm A's best response is___________

(b) If firm A produces at a level of 8, firm B's best response is___________

(c) The Nash equilibrium quantity choices are: ________________

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Business Economics: Two firms a and b are engaged in a cournot quantity
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