Suppose that the demand functions for the product of two profitmaximizing firms in a duopolistic industry are: Q1=50-5P1+2.5P2
Q2=20-2.5P2+5P1
Total cost functions for the two firms are
TC1= 25Q1
TC2=50Q2
a. What are the reaction functions for each firm?
b. Give the equilibrium price, profit-maximizing output, and profits for
each firm.

One of the scarce resources that constrain our behavior is time. each of us has only 24 hours in a day, and we must allocate our time in a given day among competing alternatives. how do you go about allocating your time in a given day among competing alternatives? how do you go about weighing the alternatives? once you choose a most important use of time, why do you not spend all your time on that activity? a. as more and more time is spent on one activity, the opportunity cost of that activity in terms of other activities rises. b. as less and less time is spent on one activity, the opportunity cost of that activity in terms of other activities rises. c. as more and more time is spent on one activity, the opportunity cost of that activity in terms of other activities falls. d. b and c only.