題組內容
3. (24 %)
Consider a duopoly market that consists of two firms, OpenAI and Google. The competition proceeds as follows:
Each firm has the following cost function:
$$Ci(qi, xi, xj) = (70 - (xi + xj))qi + 2xi^2,$$
where $xj$ is the R&D level the other firm chooses. Let the inverse demand function of the market be $P = 100 - \frac{1}{3}Q$, where $Q = qO + q_G$.
(e) Find the social welfare under this scenario, where the social welfare is defined as the sum of the consumer surplus and the firms' profits.
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