Identify the cournot-nash equilibrium output for each firm

Assignment Help Business Economics

Reference no: EM13772344

Consider a market containing four firms, each of which produces an identical product. The inverse demand for this product is p = 100 ? Q. The production cost for each firm is identical and given by C(qi) = 20qi , i = 1, 2, 3, 4. This means that for each of these firms, marginal costs are constant at $20 per unit.

a. Identify the Cournot-Nash equilibrium output for each firm, the product price, and the profit to each firm.

b. Suppose that firms 1 and 2 merge and that all firms continue to act as Cournot competitors after the merger. Show that this merger is bad for consumers.

c. Confirm that the merger between firms 1 and 2 is unprofitable.

Reference no: EM13772344

Questions Cloud

Effect of dividend policy on cost of capital-stock prices : Modigliani and Miller (MM) on the one hand and Gordon and Lintner (GL) on the other hand have expressed strong views regarding the effect of dividend policy on a firm’s cost of capital and value. In essence, what are MM’s and GL’s views regarding the..

Write a three pages paper on the everglades wildlife : Write a three pages paper on the Everglades wildlife. Paper must inform about threatned and endangered species in the Everglades and the climate of the Everglades.

Write the paper in a narrative format : Write the paper in a narrative format, detailing what you learned as the result of speaking with this person. Do not submit a "question-answer" paper

Using the money market and bond market analysis : Using the money market and bond market analysis explain how the Federal reserve could lower the interest rates by buying government bonds from the banking sector of the U.S. economy ( should included two graphs and an explanation)

Identify the cournot-nash equilibrium output for each firm : Consider a market containing four firms, each of which produces an identical product. The inverse demand for this product is p = 100 ? Q. The production cost for each firm is identical and given by C(qi) = 20qi , i = 1, 2, 3, 4. This means that for e..

Describe the role of the family : How does the sociological perspective functionalism describe the role of the family? Does this conceptualization of the family fit in with the diverse family forms that you see in today's society?

Vertical merger affect profit and consumer welfare : Suppose that a manufacturer is a monopolist in selling some product to a number of competitive retailers at wholesale price w. The manufacturer has marginal cost of $10 per unit. Each retailer pays w to the manufacturer and charges p for each unit it..

Write an essay on martin luther king junior : Write an essay on Martin Luther King Junior. You may choose from these people or figures: a person who is living or dead, a literary or film character, a musical star, a mythical figure, a spiritual figure, a political figure.

Firm to economically efficient from societys point of view : For a firm to be economically efficient from society's point of view, it should produce at the point at which:

User Account

All Pages