Twist on Dynamic Cournot Please answer the following questions so that I can ver

Question

Twist on Dynamic Cournot Please answer the following questions so that I can verify with my own, thank you!

5· [Twist on Dynamic Cournot] Matt (firm 1) and Jing Han (firm 2) are competing in a Cournot setting in the t-shirt market for each of two time periods. Let qi,t and q2,t be their chosen output, respectively, in periods t ,2). The demand for the market is PQ) A - Qt, where Qt q1,t q2, for each time period. Quantities in one period do not affect demand for quantities in the other period Though fierce competitors Jing Han and Matt utilize the same technology in producing t-shirts, and their costs improve with total production. In the first period their technology is terrible: marginal costs are ci-c

Explanation / Answer

Marginal analysis involves a cost-versus-benefits comparison of various business activities. In marginal analysis, the cost of an activity is measured against incremental changes in volume to determine how the overall change in cost will affect the bottom line of a business. Marginal analysis can show the cost of additional production by a business all the way up to the break-even point. This is generally the maximum cost that a business can sustain without losing money.

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