Originally Posted by

**kingwinner** Suppose there are only two producers, A and B, in a market producing the same good with the same total cost function

TC=0.05 Q^2 +100.

The market demand is given by

Q=1000-5P.

a) Find the equilibrium price and total output in the Bertrand model.

b) Find the equilibrium price and total output in the Cournot model.

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Can someone please teach me how to compute these? If the marginal cost were constant, then I think I know how to answer these; for this problem, it's the cost function that is confusing me.

For the Bertrand model, we set P=MC, and solve for the output, but what is the MC in this case? There are two firms, so do we have to add them to get the MC? But how to add them? What is the equation that I have to solve?

I hope someone can be kind enough to help me out! Thank you so much!