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Managerial Economics · End Term · 13 Apr 2025 · January 2025 term

Question 8: Suppose two firms operate in a market and can produce at …

Question 8

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Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = $5. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is given by Q1 + Q2 = 53 – P. Assuming that the firms are competing as per the Cournot competition and answer the given subquestions.

Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = $5. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is given by Q1 + Q2 = 53 – P. Assuming that the firms are competing as per the Cournot competition.
Find out the equilibrium quantity for firm 1 Q1*= ______________

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Correct answer: 16

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Question 8 of 40 in the IIT Madras BS Managerial Economics (Managerial Economics) End Term paper sat on 13 Apr 2025, in the January 2025 term (IIT M IMPROVEMENT AN EXAM QIM3 13 Apr 2025). It carries 1 mark.

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