Chemistry Reference
In-Depth Information
x
2
L
2
A
c
1
B
x
1
L
1
A
c
2
B
Fig. 1.5
Example 1.2; the Cournot model with linear price function and quadratic cost function
in the case of duopoly .N
D
2/. The figure shows case (iii) when e
k
D
B, and there exist three
equilibria
R
k
.Q
k
/
L
k
Q
k
P
i ¤k
L
i
A
c
k
.B
C
e
k
/L
k
B
Fig. 1.6
Example 1.2; the Cournot model with linear price function and quadratic cost function.
The figure shows case (iv) when e
k
<
B. The best response of the typical firm is determined by
the fact that the profit function is linear in this case
8
<
if L
k
.A
BL
k
BQ
k
/
.c
k
L
k
C
e
k
L
k
/>0;
L
k
R
k
.Q
k
/
D
if L
k
.A
BL
k
BQ
k
/
.c
k
L
k
C
e
k
L
k
/<0;
0
:
if L
k
.A
BL
k
BQ
k
/
.c
k
L
k
C
e
k
L
k
/
D
0:
f
0
I
L
k
g
This function is illustrated in Fig. 1.6 in the case when
0<.A
c
k
.B
C
e
k
/L
k
/=B <
X
i
L
i
:
¤
k
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