bonjour;
voila je suis erasmus et je suis une matiere compliquer et en anglais en espagne
pourriez vous m,aider s'il vous plait merci
question1
Consider two firms producing a homogeneous product and simultaneously and independently
deciding how much they wish to produce. Market demand equals D(p) = 100 – p. The marginal
and average cost of production of both firms is constant and equal to 10.
(i) Represent graphically the best-reply functions of both firms.
(ii) Find the equilibrium quantities.
Suppose now that firm 1 maximizes its profit while the CEO of firm 2 is contractually bound to
maximize a weighted sum of firm 2’s profit and the quantity, q2, it produces. In sum, firm 2
maximizes π2 + a q2 where a  (– , +).
(iii) Compute the Nash-Cournot equilibrium of this game.
(iv) Which values should the owner of firm 2 choose for a?
(v) How will this behavior on the part of firm 2 affect both firms’ profit compared to the
case where they both maximize profits?
(vi) Explain the previous result intuitively.