In a Cournot duopoly, we find that Firm 1's reaction function is ...

[Mr. Wonderful]

In a Cournot duopoly, we find that Firm 1's reaction function is Q1 = 50 - 0.5Q2, and Firm 2's reaction function is Q2 = 75 - 0.75Q1. What is the Cournot equilibrium outcome in this market?
 
  A) Q1 = 20 and Q2 = 60
  B) Q1 = 20 and Q2 = 20
  C) Q1 = 60 and Q2 = 60
  D) Q1 = 60 and Q2 = 20

Question 2

Bundling is effective when the demands for the bundled products are ________ and ________ correlated.
 
  A) different; negatively
  B) different; positively
  C) similar; negatively
  D) similar; positively
  E) identical; perfectly

[dpost18]

Answer to Question 1

A

Answer to Question 2

A

[Mr. Wonderful]

Gracias!

[Liddy]

Excellent