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Question: The market for lemonade in a town of two stands (i.e., firms), 1 and 2. An agricultural economist...

Show transcribed image text The market for lemonade in a town of two stands (i.e., firms), 1 and 2. An agricultural economist estimates the following demand for in this town: Q = 300 middot P, where Q is the market quantity and P is the market price. Total costs of the two firms are indicated below: TC_1 = 60 Q_1 (such that marginal cost is constant at 60) TC_2 = 40Q_2 (such that marginal cost is constant at 40) Acting as Cournot competitors, find and graph the reaction functions of each firm (indicating appropriate horizontal- and vertical-axis intercepts) Determine the Cournot equilibrium output of each producer, as well as the profit of each producer.

The market for lemonade in a town of two stands (i.e., firms), 1 and 2. An agricultural economist estimates the following demand for in this town: Q = 300 middot P, where Q is the market quantity and P is the market price. Total costs of the two firms are indicated below: TC_1 = 60 Q_1 (such that marginal cost is constant at 60) TC_2 = 40Q_2 (such that marginal cost is constant at 40) Acting as Cournot competitors, find and graph the reaction functions of each firm (indicating appropriate horizontal- and vertical-axis intercepts) Determine the Cournot equilibrium output of each producer, as well as the profit of each producer.