Assume that two companies (C and D) are duopolists that produce identical produces. Demand for the products is given by the following linear demand function: P=600-Qc-Qd where Qc and Qd are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TCc=25000+100Qc
TCd=20000+125Qd
Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm's output will not change).
Determine the long run equilibrium output and selling price for each firm.