1. Cournot Oligopoly.  SupposetwoCournotfirmsfacethefollowinginversedemandP=12−2q1−q2  wherecostfunctionsforfirm1is3q1  andforfirm2is4q2.
   1. Findeachfirm’sreactioncurveandsolvefortheCournot-Nashequilibrium.

B.Findthetotalmarketprofit(sumprofitsfrombothfirms)

1. Characterizeanequilibriuminwhichonlyonefirmproducesbutwherethere arepositiveeconomicprofits.Findtheprice,theoutputlevel,andtotalprofits. [Hint:  thinkcarefullyabout which firmoptimallyremainsinthemarketand howtheotherfirmneedstobecompensatedtostayoutof themarket]

2. • You Want A Similar Paper Done? Don’t be stressed, Click Here To Order this essay!!!