Four Cournot competitors face an inverse market demand curve of P = 1620 – 8Q, each with identical costs Ci = 4000 + 60qi. Find firm profits, market price, and consumer surplus at a Cournot equilibrium to answer the following questions. a) show that a merger between F3 and F4 will not be profitable if their costs remain unchanged. (Hint:  the “n” in the profit formula changes from 4 to 3.)

Micro Economics For Today
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Chapter10: Monopolistic Competition And Oligoply
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Four Cournot competitors face an inverse market demand curve of P = 1620 – 8Q, each with identical costs Ci = 4000 + 60qi. Find firm profits, market price, and consumer surplus at a Cournot equilibrium to answer the following questions.

a) show that a merger between F3 and F4 will not be profitable if their costs remain unchanged. (Hint:  the “n” in the profit formula changes from 4 to 3.)

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