The Lerner index at the equilibrium of the linear Cournot symmetric model is equalа-сto L (n)wherea>c, c represents marginal cost, and n represents thea+ncnumber of firms in the industry. The equilibrium quantity supplied by a firm isа-сa+nc9i =for i = 1, . . , n and the equilibrium price is p* (n) =Fromn+1n+1this it can be concluded that as n increases without bound:the individual quantity supplied decreases.the equilibrium price converges to a value greater than the marginal cost.the markup increases towards one.the total quantity in the market increases.

Equilibrium price refers to the price under which the supply is equal to the demand in a perfectly…

The Lerner index at the equilibrium of the linear Cournot symmetric model is equal а-с to L (n) = where a>c, c represents marginal cost, and n represents the a+nc number of firms in the industry. The equilibrium quantity supplied by a firm is а-с a+nc 9i for i = 1,.., n and the equilibrium price is p* (n) || n+1 n+1. From this it can be concluded that as n increases without bound: the individual quantity supplied decreases. the equilibrium price converges to a value greater than the marginal cost. the markup increases towards one. the total quantity in the market increases.

The Lerner index at the equilibrium of the linear Cournot symmetric model is equal а-с to L (n) = where a>c, c represents marginal cost, and n represents the a+nc number of firms in the industry. The equilibrium quantity supplied by a firm is а-с a+nc 9i for i = 1,.., n and the equilibrium price is p* (n) || n+1 n+1. From this it can be concluded that as n increases without bound: the individual quantity supplied decreases. the equilibrium price converges to a value greater than the marginal cost. the markup increases towards one. the total quantity in the market increases.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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