Asap ppzThree electricity generating firms are competing in the market with the inverse demand given by P[Q) = 21-Q. All firms have constant marginal costs. Firm 1's marginal cost is MC=5; it has a capacity constraint of K1= 5 units. Firm 2's marginal cost is MC 8; it has a capacity constraint of K2 = 3 units. Firm 3's marginal cost is MC = 10; it has a capacity constraint of K3= 3 units.A. The three firms compete in the style of Cournot. Please compute the Nash equilibrium quantities. Also compute the price in the Nash equilibrium.B. Which of these firms would have produced a larger quantity if it had a larger capacity? Please explain. Three electricity generating firms are competing in the market with the inverse demand given by P(Q) = 21-Q. llfirms have constant marginal costs. Firm l's marginal cost is MC = 5; it has a capacity constraint of K: = 5 units.Firm 2's marginal cost is MC = 8; it has a capacity constraint of K2 = 3 units. Firm 3's marginal cost is MC = 10; it hasa capacity constraint of K3 = 3 units.A. The three firms compete in the style of Cournot. Please compute the Nash equilibrium quantities. Also computethe price in the Nash equilibrium.B. Which of these firms would have produced a larger quantity if it had a larger capacity? Please explain.

Answered: Three electricity generating firms are…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Asap ppz

Three electricity generating firms are competing in the market with the inverse demand given by P[Q) = 21-Q. All firms have constant marginal costs. Firm 1's marginal cost is MC=5; it has a capacity constraint of K1= 5 units. Firm 2's marginal cost is MC 8; it has a capacity constraint of K2 = 3 units. Firm 3's marginal cost is MC = 10; it has a capacity constraint of K3= 3 units.
A. The three firms compete in the style of Cournot. Please compute the Nash equilibrium quantities. Also compute the price in the Nash equilibrium.
B. Which of these firms would have produced a larger quantity if it had a larger capacity? Please explain.