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Consider two firms facing the demand curve 18 17 16 P=60-5Q where Q Q +Q The firms cost functions are C1(Q110+15Q1 12 and C2 (°2)-5+3002 Suppose that both firms have entered the industry. What is the joint profit-maximizing level of output? How much will each firm produce? Combined, the firms will produce units of output of which Firm 1 w produce units and Firm 2 will produce units. (Enter a numeric response using a real number rounded to two decimal places.) 0 1 2 3 45 67 8 9 10 11 12 13 14 15 16 17 18 Firm 2s output What is each firms equilibrium output and profit if they behave noncooperatively? Use the Cournot model If the firms compete, then Firm 1 will produceunits of output and Firm 2 will produceunits of output.

What is each firms equilibrium output and profit if they behave noncooperatively? Use the Cournot model 17 If the firms compete, then Firm 1 will produceunits of output and Firm 2 will produceunits of output. 14 12 Draw the firms reaction curves and show the equilibriunm To do this, draw Firm 1s reaction curve (RC1) and Firm 2s reaction curve (RC2) in the figure to the right using the line drawing tool. Attach the appropriate labels Then, indicate the Cournot Equilibrium (Equilibrium) using the point drawing tool. Attach the provided label If you are not prompted for a label, then you have used the wrong drawing tool. 0 1 2 3 4 5 67 8 9 10 11 12 13 14 15 16 17 18 Firm 2s output How much should Firm 1 be willing to pay to purchase Firm 2 if collusion is illegal but a takeover is not? Firm 1 would be willing to pay Sto purchase Firm 2 (so that Firm 2 does not to produce)

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ニ (60-53) q d Q Mtauginas cet 2- ir maximig ina quantt 60-10 & 15 New t uwiu be stima and tirm no outpu (31.5)(o)30 (o)) TTI t = $ 86.25In thu cournot mocul, firm 1 taker frm upuau Now tarine axtal dvivatius I O dindla변 30-59,-10 l o lo l 0 ) o 450-150 +a59, l o = Q1 i0to lo dlubst서 60-25 l o l o 3 RC2f uur want to know how ท much Jhauld for m 11. It bťuHurn , r m fokeavor tu nst we muu omau itu ati i1.mptitr in Hu mono卢 on veus us those rn an alge冲 Thu difference behoun thu two utube lohat firm」 Tcatung T1.25 T(354)-C10 r1S) Fitm i will be utung to pay to 32 1 25

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