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Assume there're three firms with the same individual demand function. This function is Q=1,000-40P. Assume each firm had the diffeerent cost function these functions are: Firm 1: 4,000+ 5Q
Firm 2: 3000 + 5Q
Firm 3: 3,000 + 7Q
What price should each firm charge if it want to maximize its profit or minimize its loss
Why the answer to the preceding question indicates that two of the of the firms should charge the same price and the third should charge a higher price?
Which firms will be most vulnerable to a price war Explain?
Please show all work for a complete understanding of this problem.
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