In a market there are 2 companies: C1 and C2, who are selling the same goods and competing on prices. The demand function of the good is Q=3000-100P, and the minimum fraction of price is 0.01$ a)...

In a market there are 2 companies: C1 and C2, who are selling the same goods and competing on prices. The demand function of the good is Q=3000-100P, and the minimum fraction of price is 0.01$

a) If the companies have the same cost function C(q)=5q, what will be the equilibrium point? And the quantity sold and the profit of each company? Is the equilibrium efficient?

b) If the company C1 has C(q)=5q and C2 has C(q)=6q, how will your answer change?

Asked on by raconico

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