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Market converges to marginal cost as n increases

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(a) This was also illustrated in class and in the lecture notes. Where {a; b; cg} > 0, p(Q) = a-bQ, and TC(q) = cq, show that the equilibrium quantity chosen by a Cournot competitor in an n-firm oligopoly is equal to qi =(a-c)/(n + 1)b

(b) Show that the equilibrium price in this market converges to marginal cost as n increases.

Reference no: EM131405536

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