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I wo Ⅲne prodneling: houlolyucos!택 with uvrar kniand fulM.ion 있wn by The cost function of each firm i is C(ai)- i, where c > c2, and c < a. out put level, aiming to maximize his profit. The two firms are making their decisions simultaneously and independently Find their respective output levels. What is the effect of technical change that lowers firm 2s unit cost c2 (while not affecting firm 1s unit cost c) on the firms equilibrium outputs, the total output, and the price?

Game Theory

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