Consider a market with demand P(Q) = 112 3Q in which 9 identical firms compete. All firms face T C(Q) = 52Q. Let X = Q2 + Q3 + . + Q9. (a) Write out the residual demand curve for firm 1 in terms of X and Q1. (b) Find the corresponding marginal revenue (c) What is the reaction function for firm 1 (in terms of X)
Consider a market with demand P(Q) = 112 3Q in which 9 identical firms compete. All firms face T C(Q) = 52Q. Let X = Q2 + Q3 + . + Q9. (a) Write out the residual demand curve for firm 1 in terms of X and Q1. (b) Find the corresponding marginal revenue (c) What is the reaction function for firm 1 (in terms of X)
Chapter1: Making Economics Decisions
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![Consider a market with demand P(Q) = 112 -
3Q in which 9 identical firms compete. All
firms face T C(Q) = 52Q. Let X = Q2 + Q3 + . ..
+ Q9.
(a) Write out the residual demand curve for
firm 1 in terms of X and Q1.
(b) Find the corresponding marginal revenue.
(c) What is the reaction function for firm 1 (in
terms of X).
(d) Find the Cournot equilibrium (market
quantity QM* , P* ).
(e) Determine profits for each firm.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F192702a0-2cf2-48a3-932e-b125257e4a78%2F231083d6-f605-4457-902e-c24a95263c19%2Fw6tf9u_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider a market with demand P(Q) = 112 -
3Q in which 9 identical firms compete. All
firms face T C(Q) = 52Q. Let X = Q2 + Q3 + . ..
+ Q9.
(a) Write out the residual demand curve for
firm 1 in terms of X and Q1.
(b) Find the corresponding marginal revenue.
(c) What is the reaction function for firm 1 (in
terms of X).
(d) Find the Cournot equilibrium (market
quantity QM* , P* ).
(e) Determine profits for each firm.
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