Three firms sell identical products in a market with inverse demand given by P(Q) = 540 - 4Q, where Q-q1+q2+ q3, i.e., the sum of all quantities produced by all three firms. Each firm has a constant marginal cost of production MC 23 and no fixed cost. Firm 1 chooses q1 first. Firms 2 and 3 simultaneously choose q2 and q3 after observing q1. = Calculate the subgame perfect equilibrium profit of firm 1. Round your answer to 2 decimal places.

Three firms sell identical products in a market with inverse demand given by P(Q) = 540 - 4Q, where Q-q1+q2+ q3, i.e., the sum of all quantities produced by all three firms. Each firm has a constant marginal cost of production MC 23 and no fixed cost. Firm 1 chooses q1 first. Firms 2 and 3 simultaneously choose q2 and q3 after observing q1. = Calculate the subgame perfect equilibrium profit of firm 1. Round your answer to 2 decimal places.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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