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Problem 2. Consider a market for electrical energy that is supplied by two generating companies whose...

Problem 2. Consider a market for electrical energy that is supplied by two generating companies whose cost functions are:

CA = 36PA

CB = 31PB

where PA and PB are the generations.

The inverse demand curve for this market is:

π = 120 − D

where D is the total demand.

Under the Cournot model of competition, find the equilibrium production for each company and their respective profits.

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