Consider an industry consisting of two firms producing an identical product. The inverse market demand equation is P = 100 − 2Q. The total cost equations for firms 1 and 2 are TC1 = 4Q1 and TC2 = 4Q2, respectively. Suppose that the two firms are Cournot rivals. Firm 2 will earn a profit of:
$512.
$732.
$836.
$1,014.
None of the above.
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