Answer to Question #70759 in Economics of Enterprise for MELVIN MULEYA

Question

Consider a market with two dominant firms (curnot duopoly) producing a homogenous product.
The inverse market demand function is given by

Answer 1

According to the Cournot duopoly, the inverse market demand function is given by
P=a-b*(Q1+Q2),
Q1 – quantity of production of the first firm, Q2 – quantity of production of the second firm.