There are two firms who will compete on quantity. The market demand is D(P)=190-3P. Both firms initially have a marginal cost of 10. However, if the first firm makes an investment of 100, it can lower its marginal cost to 5. Will it?

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There are two firms who will compete on quantity. The market demand is D(P)=190-3P. Both firms initially have a marginal cost of 10. However, if the first firm makes an investment of 100, it can lower its marginal cost to 5. Will it?

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