Suppose p(q) = a – bq in the Cournot duopoly game of example 1.3. (a) Check that the second-order…

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Suppose p(q) = a – bq in the Cournot duopoly game of example 1.3.

(a) Check that the second-order and boundary conditions for equation (1.3) are satisfied. Compute the Nash equilibrium.

(b) Now suppose there are I identical firms, which all have cost function  Compute the limit of the Nash equilibria as 1 ∝. Comment.