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Cournot’s model of oligopoly - page 10 / 38

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10 / 38

p2 < c

( p 1 - c ) D ( p 1 )

p2

profit

c

a

p1

Any price greater than p2 is a best response to p2:

B1(p2) = {p1 : p1 > p2}.

Note: a price between p2 and c is a best response!

p2 = c

Any price greater than or equal to p2 is a best response to p2:

B1(p2) = {p1 : p1 p2}.

10

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