# Suppose an industry has two firms. The price of the industry output is given by P = 80 - Q, where...

## Question:

Suppose an industry has two firms. The price of the industry output is given by {eq}P = 80 - Q {/eq}, where {eq}Q = Q_1 + Q_2 {/eq} is the total output of the two firms. Firm 1's cost function is {eq}10Q_1 {/eq}. Firm 2's cost function is 0. In the Cournot-Nash equilibrium, firm 2's production is _____ units.

## Imperfect Competition:

In an imperfect form of market, the firms have the liberty to either compete through prices or through the quantities. The market which competes using prices as the medium belongs to the Bertrand model. The market which competes using the quantities as the medium belongs to the Cournot model.

## Answer and Explanation: 1

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{eq}\begin{align*} P &= 80 - Q\\ Q &= {Q_1} + {Q_2}\\ T{C_1} &= 10{Q_1}\\ T{C_2} &= 0 \end{align*} {/eq}

The marginal revenue functions...

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Chapter 22 / Lesson 2Learn the definition of imperfect competition and understand how it works. Study imperfect competition examples: monopoly, oligopoly, and monopolistic competition.

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