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Consider the Cournot model with market demand function p(q_1, q_2)=17-q_1-q_2p(q1​,q2​)=17−q1​−q2​, and two different cost functions for...

Consider the Cournot model with market demand function p(q_1, q_2)=17-q_1-q_2p(q1​,q2​)=17−q1​−q2​, and two different cost functions for each firm: c_1(q_1)=q_1c1​(q1​)=q1​, c_2(q_2)=3q_2c2​(q2​)=3q2​.

In the pure NE, firm 1 produces:

and firm 2 produces:

In equilibrium, the market price is:

Show your steps. Remember to write down the profit function of each firm and solve for their best response functions.

Which firm has a bigger market share? Explain.

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