Firm A and Firm B are the only two firms in a market where price is determined by the inverse demand function: P = 147 - Q. Q is the sum of Firm A and Firm B's output, so Q = 9A + 9B Firm A's total cost function is given by TCA(9A) = 39A Firm B's total cost function is given by TCB(9B) = 89B If these firms Cournot compete (simultaneously setting quantities), what will market price be when both firms are maximizing profits in equilibrium? (Note: The answer may not be a whole number, so round to the nearest hundredth)

Firm A and Firm B are the only two firms in a market where price is determined by the inverse demand function: P = 147 - Q. Q is the sum of Firm A and Firm B's output, so Q = 9A + 9B Firm A's total cost function is given by TCA(9A) = 39A Firm B's total cost function is given by TCB(9B) = 89B If these firms Cournot compete (simultaneously setting quantities), what will market price be when both firms are maximizing profits in equilibrium? (Note: The answer may not be a whole number, so round to the nearest hundredth)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter11: Price And Output Determination: Monopoly And Dominant Firms

Section: Chapter Questions

Problem 3E

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