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Exercise 1. In a market two firms, competing on quantity -à la Cournot- face the following inverse demand: P= 14 – Q. Th
Posted: Thu May 05, 2022 7:36 am
by answerhappygod
- Exercise 1 In A Market Two Firms Competing On Quantity A La Cournot Face The Following Inverse Demand P 14 Q Th 1 (248.85 KiB) Viewed 27 times
Exercise 1. In a market two firms, competing on quantity -à la Cournot- face the following inverse demand: P= 14 – Q. The two firms are identical and their marginal and average cost is constant, MC=AC=2 (there are no fixed costs). Calculate: a. the quantity produced by each firm and the total quantity. b. the price of equilibrium. c. the profit gained by each firm. d. the surplus of consumer. e. the social welfare. f. the Lerner Index. Exercise 2. The same demand and cost functions of exercise 1 but now there are five firms on the market competing on quantity. Calculate the solution for the same variables.