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Using Calculus For Maximization Problems

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Cournot Doupoly (Game Theory). Assumption: Each firm takes the other firms output as exogenous and chooses output to maximize its own profits. Market Demand: P = a−bq or P = a−b(q 1 +q 2)(q 1 +q 2 = q) Where q i is firm i’s output i =1,2 Each firm faces the same cost function TC = K +cq i (i =1,2) Each firm’s profitfunctionis π ...

  Theory, Maximization

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