Question

Bartels and Jaymes are two individuals who one day discover a stream that flows wine cooler instead of water. Bartels and Jaymes decide to bottle the wine cooler and sell it. The marginal cost of bottling wine cooler and the fixed cost to bottle wine cooler are both zero. The market demand for bottled wine cooler is given as:

            P = 90 - 0.25Q

where Q is the total quantity of bottled wine cooler produced and P is the market price of bottled wine cooler. Suppose that Bartels and Jaymes act as Cournot duopolists.

1. (1 point) Write the market demand as a function of QB (the quantity produced by Bartel) and QJ (the quantity produced by Jaymes).
2. (2 point) Show how to derive the reaction functions for Bartels?
3. (1 point) By symmetry, deduce the reaction function for Jaymes?
4. (2 points) What levels of output will Bartels and Jaymes produce?.
5. (1 point) What is the price of wine coolers?
6. (2 point) Calculate the profits for Bartels and Jaymes.

Clarity of the answers: 1 Point.

Show the essential steps of your work. Only partial credit will be given if work not shown.

Answer 1

Answer)

So, I have shown all the steps clearly..

If you still face any doubts please comment...

​​​​​​