# Economics

Two firms produce the same good and compete against each other in a Cournot market. The market demand for their product is P = 204 - 4Q, and each firm has a constant marginal cost of \$12 per unit. MR1 = 204 - 8q1 - 4q2. Let q1 be the output produced by firm i, where i = 1,2.

1. Firm 1's reaction function is:
2. In the Cournot equilibrium for this market, each firm will produce ____ unites of output, and the market price will be___.
3. Each firm will earn a profit of ___.

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1. Q1=25.5-0.5Q2

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2. "Two firms produce the same good and compete against each other in a Cournot market. The market demand for their product is P = 204 - 4Q, and each firm has a constant marginal cost of \$12 per unit. MR1"

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