Firms A and B are duopolist producers of widgets. The marginal cost of producing a widget is $27. The market demand for widgets is Qd = 300P-2, where Q measures thousands of widgets per year. Competition in the widget market is described by the Cournot model. What are the firms Nash equilibrium outputs? What is the resulting price? What do they each earn as profit? How does the price compare to marginal cost? How do the price and the two firms joint profit compare to the monopoly price and profit?
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