The market demand for personalized key chains is given by P = 150 - Q_D.Suppose that there are only two firms in this market;firm 1's cost function is given by C₁ = 5Q₁² and firm 2's cost function is given by C₂= 0.3Q₂.Derive the reaction function that shows firm 1's most profitable output as a function of firm 2's output.

Question

Quizplus · Accepted Answer

The Answer of The market demand for personalized key chains is given by P = 150 - Q_D.Suppose that there are only two firms in this market;firm 1's cost function is given by C₁ = 5Q₁² and firm 2's cost function is given by C₂= 0.3Q₂.Derive the reaction function that shows firm 1's most profitable output as a function of firm 2's output.

The Market Demand for Personalized Key Chains Is Given by P