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Consider a model of Cournot competition as studied in class, with 2 firms and a linear inverse demand function P(Q) = a - Q (where Q = q1 + q2 is the total quantity produced by the two firms and a is a parameter). The firms have differentmarginal costs: c1 for Firm 1 and c2 for Firm 2.(a) Find the Nash equilibrium.
(b) Assume Firm 1's marginal cost is larger (c1 > c2). Which firm produces more in equilibrium? How do the quantities produced in equilibrium change if Firm 1 improves its technology, leading to a lower c1 (while c2 is unchanged)?
(c) Find the total quantity produced and each firm's profit in equilibrium. Describe what happens to these when Firm 1 changes its technology as above.
.Clearly explain how net foreign investment links the market for loanable funds and the market for foreign currency exchange. Make sure you define net foreign investment in your an
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Over long spans of time, macroeconomies typically grow, but over short spans there are fluctuations in output and prices known as ____ ?
according to the Keynesian model, the short-run aggregate supply curve is horizontal when: A: there are unemployed resources and prices do not fall when aggregate demands falls. B:
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