00:01
So here we're talking cournot competition, which is quantity competition.
00:08
And quantity competition means, again, we're going to try to maximize profit, right? but we need to maximize profit, taking the other person's quantity into consideration.
00:20
So for firm a, we are going to max profit, which is my revenue price times quantity minus my cost.
00:28
We're going, we're told that the marginal cost function is linear because the marginal costs are constant.
00:34
We're given a demand function.
00:36
But the key is if we have q is equal to 15 minus p, we have p is equal to 15 minus q, which is really minus qa minus qb, because this quantity is the sum of both the individual quantities.
00:51
So this is going to be 15 minus qa minus qb times qa minus the fixed cost minus, for a, 1q, right? so now, and that's qa, we take the derivative with respect to qa.
01:11
I get 15 minus 2qa minus qb minus 1 is equal to 0...