Three firms share a market. The demand function is P(q1, 92, 93) = 10 – q1 – 92 – 93, where q; is the output of firm i, Player i. The marginal cost per unit for each firm is zero. Suppose firm 1 is a market leader, and that firm 2, and firm 3 choose q2 and q3 simultaneously after observing q1 Find the SPE of this game. How much is produced by firm 2? Numerical answer How much is produced by firm 1, 2, and 3?

Three firms share a market. The demand function is P(q1, 92, 93) = 10 – q1 – 92 – 93, where q; is the output of firm i, Player i. The marginal cost per unit for each firm is zero. Suppose firm 1 is a market leader, and that firm 2, and firm 3 choose q2 and q3 simultaneously after observing q1 Find the SPE of this game. How much is produced by firm 2? Numerical answer How much is produced by firm 1, 2, and 3?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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