北大光华微观经济学作业 Problem Set-4.pdfVIP

Intermediate Microeconomics Fall 2008 Problem Set 4 1．Two firms A and B produce luxury sheepskin auto seat covers. Each firm has a cost function given by C(q) 20q +q2 . The market demand for these seat covers is represented by the inverse demand curve P 200 −2Q , where Q qA =+qB . 1) If each firm acts to maximize its profits, taking its rival’s output as given, what will be Cournot equilibrium output level for each firm? What are the profits for each firm?