Consider an industry with four competitors whosimultaneously set output levels (Cournotmodel).Market demand is given by Q = 50-P4. Firms 1 and 2 have a cost function given by C= 120 + 30q.Firms 3 and4 have a cost function given by C =80 + 50q.%3D%3D(a) Determine the equilibrium market shares ofeach firm. Determine the value of theconcentrationindex HHI.(b) Suppose that firms 1 and 4 merge, formingFirm 1&4; and that the marginal cost of thenewly formed firm is equal to c1&4 = c1 = 30.Determine the new equilibrium market shares%3Dof each firm. Determine the new value of theconcentration index H.

The purpose of this question is to be Cournot model, each firm chooses its output level based on its…

Consider an industry with four competitors who simultaneously set output levels (Cournot model). Market demand is given by Q = 50-P 4. Firms 1 and 2 have a cost function given by C = 120 + 30q. Firms 3 and 4 have a cost function given by C = 80 + 50g. (a) Determine the equilibrium market shares of Si.. S LL

Consider an industry with four competitors who simultaneously set output levels (Cournot model). Market demand is given by Q = 50-P 4. Firms 1 and 2 have a cost function given by C = 120 + 30q. Firms 3 and 4 have a cost function given by C = 80 + 50g. (a) Determine the equilibrium market shares of Si.. S LL

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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