(2) Cournot oligopoly with N firms. Suppose that, instead of the two-firm model discussedin class, we solve for the Nash equilibrium when N firms compete on quantity simul-tancously. Let Q= a – Q and marginal cost is a constant c for all firms.= q1 + ... + qn, where q; is the production of firm i. As before,(a) Find the Nash equilibrium quantities.(b) What is the market price?(c) What happens to prices and quantities as N → ?

Q=q1 + q2 +...........+ qn MC = c P= a- Q-------1 Let X = q2 +q3 +...........+ qn

(2) Cournot oligopoly with N firms. Suppose that, instcad of the two-firm model discussed in class, we solve for the Nash equilibrium when N firms compete on quantity simul- tancously. Let Q = q1 + ... + qn, where q; is the production of firm i. As before, P(Q) = Q and marginal cost is a constant c for all firms. a – (a) Find the Nash equilibrium quantitics. (b) What is the market price? (c) What happens to prices and quantitics as N → 0?

(2) Cournot oligopoly with N firms. Suppose that, instcad of the two-firm model discussed in class, we solve for the Nash equilibrium when N firms compete on quantity simul- tancously. Let Q = q1 + ... + qn, where q; is the production of firm i. As before, P(Q) = Q and marginal cost is a constant c for all firms. a – (a) Find the Nash equilibrium quantitics. (b) What is the market price? (c) What happens to prices and quantitics as N → 0?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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