Three firms compete in the style of Cournot. The market demand is given by Q(P) = 9 - P. There are no fixed cost and each firm s marginal cost is constant. Firm 1'smarginal cost is MC1 =equilibrium if and only if1, firm 2's marginal cost is MC2 = 2. Let MC3 be the marginal cost of Firm 3. All three firms will produce a strictly positive quantity in the NashМС3 <3.МС3 > 4.МС3 < 1.МС3 < 4.МС3 < 2.

Marginal cost(MC) portrays a rises in absolute expense which happens because of the work of extra…

Answered: Three firms compete in the style of…

Three firms compete in the style of Cournot. The market demand is given by Q(P) = 9 - P. There are no fixed cost and each firm s marginal cost is co

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Three firms compete in the style of Cournot. The market demand is given by Q(P) = 9 - P. There are no fixed cost and each firm s marginal cost is constant. Firm 1's
marginal cost is MC1 =
equilibrium if and only if
1, firm 2's marginal cost is MC2 = 2. Let MC3 be the marginal cost of Firm 3. All three firms will produce a strictly positive quantity in the Nash
МС3 <3.
МС3 > 4.
МС3 < 1.
МС3 < 4.
МС3 < 2.

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