Word Count : 923

---

To calculate and compare the profits earned by each firm under both the Cournot and Stackelberg models, we consider a standard duopoly setup with linear demand and cost functions. Let the inverse demand function be: P = a - bQ, where Q = q₁ + q₂ (total output by Firm 1 and Firm 2), and P is the price in the market. Let both firms have identical cost functions: C(q) = c·q, where c is the marginal cost (constant), and q is the output of the firm. --- ### 1. Cournot Model In the Cournot model, both firms choose quantities simultaneously. Step 1: Profit Function for Each Firm Profit for Firm 1: π₁ = (P - c)·q₁ = (a - b(q₁ + q₂) - c)·q₁ Profit for Firm 2: π₂ = (a - b(q₁ + q₂) - c)·q₂ Step 2: Best Response Functions Differentiate π₁ with respect to q₁ and set it equal to zero (first-order condition): dπ₁/dq₁ = a - b(q₁ + q₂) - c - bq₁ = 0 ⇒ a - c - 2bq₁ - bq₂ = 0 ⇒ q₁ = (a _____ _______ _________ _________ ___ _______ ________ __________ _____.
___ ___ ___ ________ ______ _________ _______ ____ _______ _____ _____ _________.
_____ ___ ___ ____ _____ ________ ______.
_________ _______ ____ _________ ____ ____ __________ _________ ______ _____ _____ _____.
______ ____ _______ ______ __________ _________ _________.
______ _______ ________ _______ _______ _____ ________ _________ _________.
__________ _________ _______ __________ ___ ________ ______.
________ _________ _________ ______ _________.
____ ______ _____ ___ ________.
________ _______ __________ ________ __________ __________ ________.
_________ _________ __________ ____ _________ ________.
______ _______ ________ ________ _____.
____ ____ _________ _______ _____ ______.
________ __________ __________ _________ _____ __________ ______ ___ ______.
__________ ______ ______ __________ ______ ________ ___ _______ _________ ______.
___ ___ _________ ________ ________ _____ __________ _____ ______ ____ ____.
_____ __________ ______ _____ _________ __________ _______ _______ __________ ___ _________.
__________ ________ ________ __________ __________ __________ _____ _________ __________ _____ __________.
__________ _____ ____ ___ ______ ______ __________ _____ ______ ________ ____.
_________ ______ _____ _______ ______ _____ __________ ___ ______.
____ _____ ________ _______ _______ __________ _________ ________ _______ __________.
__________ ________ _________ ________ ________ _____ ____.
_______ ______ __________ _________ ____.
______ ___ ___ _______ _____ ________ _____ ________ _______ __________ ______.
____ ________ _____ __________ _________ _______ _____ _____ ________.
____ __________ ___ __________ ________ __________ _____ ______ _____ _____ ______ ______.
__________ _____ __________ ______ ___ __________.
__________ ______ ___ ___ ___ ________ ______.
_____ _________ _______ __________ ______ __________ __________ _____ ______ _______.
_____ _________ __________ _____ ______ ______ _______ _____ ______ __________ ___ __________.
_____ ________ _______ ___ ____ __________ ______ _____ _________.
____ ______ ________ _____ _____ _________ __________ ________ ______ ___ _______ ___.
_______ ________ ___ ___ __________.
_____ ____ _____ _________ _______ _________ _____ _______ _________ ___.
________ ____ ____ _________ _________ _________ ________ ____ _____ ___ _____.
________ ______ _______ _________ _____ _______ __________ ___ ______ ___ __________ _______.
____ _________ _________ ___ ___ __________ ___ _____ __________ ________ __________ _____.
_________ ________ __________ ________ ____ ______ ____ ____.
________ _________ _________ ____ _______ __________ ________.
______ ______ __________ _______ __________ ________.
____ _________ ______ __________ ________ ____ _________ ______ ___ ________.
____ __________ __________ ___ ___ _______ _________ ________ ________ __________.
____ _______ ______ ______ _____ ____ ________ ________ _______ ________ ________.
_______ _________ _____ ___ ____ _______ _____ _____ _______ _________ _________ ______.
_______ ___ ____ __________ _______ ________ ________.
________ ______ ________ ________ _______ _____ ______ __________ _________.
___ ___ ___ _________ __________ ______ ___.
______ __________ ___ ________ __________ __________ ______.
_________ ____ ____ _______ ______ __________ ____ ____ _________ _________.
____ _________ ______ ________ ____ ____ ______.
______ _____ _____ ________ _______ ______ _______ _______.
______ _____ ____ _______ ______ _______ __________ _________ __________ _____.
_________ _______ ________ ______ ______ ______ ______ __________ ___ _______ _________.
_____ _____ ______ _________ ________ ________.
____ _____ _____ _______ ____ __________ ______ _________ ____ ______.
_______ __________ ___ _________ ____ _____ _____ _______ ___ _____ _______.
___ ____ ____ _________ ________ _________ ________ _____ __________.
______ ____ ______ _______ _______ __________.
________ _______ ___ ______ _________ _________ _______ ________.
___ _______ _______ ______ _________ _______ _________ _________.
______ _____ __________ _________ __________ ________ ______.
____ ________ ____ ____ ____ ______ _____ ________ ________ _______ ________.
_____ _________ ________ _____ __________ __________ ___ _____ _________ ___.
____ _________ ________ __________ ________ ______ ______ _______.
____ __________ _______ _________ ______.
_____ _______ ___ ______ ___ __________.
____ ________ ______ __________ ___ ____ ____ ___ ____ _____ ______.
______ ___ __________ _______ ___.
______ __________ ________ ______ ________.
_________ _____ ________ ___ ___ _________ __________ __________ _____ ___ _________ _____.
___ ___ ____ ____ ____.
___ _________ _______ ___ ____ _________.
________ _______ ________ ____ _______ ___ _______ ______ __________ ____.
___ ______ _____ _________ _________ _________ ______ ___ ___ ____ ______.
____ ______ _________ __________ ____ ______ ____.
______ _____ ____ ___ ___ _________ __________ ________ ___ ____ ____.
_____ __________ ________ __________ _________.
________ ____ _____ ______ ______ ____ _____ __________ ________.
___ _______ _____ _____ ____.
_________ _____ _____ _________ __________ __________ _________ _______ _________.
______ ______ ______ _________ _____.
____ _______ _____ ________ _____.
______ ____ _____ ________ _____ _____.
________ ______ ________ ________ ___ ___ _______ ________.
__________ ________ ______ ____ _________ _____ _______ __________.
____ ______ ________ ______ _____.
__________ _________ _________ ____ _____ ________ _____ ______ _________ _________ _______.
__________ ___ ______ ___ _____ _______.
Get Full Answer on WhatsApp