Let us consider a market where 10 firms l= {1,2,..,10} compete à la Cournot (quantity- setting competition). The inverse demand function is given by p( Q) =1200-18Q , where Q= Eiqi. The cost function is homogeneous and it is C( q) =10q. 1.the profit functions of eachiEl is: 2.Derive the best reply functions for each firm 3.Derive the market price in the Nash equilibrium of the game.
Let us consider a market where 10 firms l= {1,2,..,10} compete à la Cournot (quantity- setting competition). The inverse demand function is given by p( Q) =1200-18Q , where Q= Eiqi. The cost function is homogeneous and it is C( q) =10q. 1.the profit functions of eachiEl is: 2.Derive the best reply functions for each firm 3.Derive the market price in the Nash equilibrium of the game.
Chapter15: Imperfect Competition
Section: Chapter Questions
Problem 15.4P
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