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Suppose two identical firms produce widgets and they are the only firms in the market. Their costs are given by C1 = 5 (Q1 ) and C2 = 5 (Q2 ) respectively, where Q1 is the output of firm one and Q2 is the output of firm 2. Price is determined by the following demand curve: (MC for each firm is 5)
P= 100-Q, where Q = Q1 + Q2 .
Find the Stackleberg Equilibrium.
Essay on Market imperfection associated with negative externalities
Graph the accompanying demand data, and then use the midpoint formula for E d to determine price elasticity of demand for each of the four possible $1 price changes.
Find the velocity given that the market is in equilibrium. MD1 is the relevant curve and it is given that the real GDP is 30,000.
The questions posed are broad and open ended so be careful to allow yourself enough research and planning time.
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