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Question 21 (cournot): After having come to Q1 = 22 – 0,5Q2 … Which formula do you plug this in to find the Quantity of 14.67?
?
Hi HW,
You will have two formulas (best response curves):
Q1 = 22 β 0,5Q2
Q2 = 22 β 0,5Q1
And you can simply substitute/plug one into the other one and solve for the unknown :).
Q1 = 22 β 0,5(22 β 0,5Q1)
Q1 = 22 β 11 β 0,25Q1
0.75Q1 = 11
Q1 = 11/0.75
Q1 = 14.67