Consider the following Cournot oligopoly:
There are two identical firms in the industry, which set their quantities produced simultaneously.
The two firms face a market demand curve, Q = 120 - P, in which Q = q1 + q2.
Each firm's cost function is ci(qi) = qi2.
Each firm acts to maximize its own profit.
A) Write down each firm's profit function.
B) From the profit functions, derive a best response rule for each player.
C) From the best response rules, find the Nash Equilibrium in this market.