Suppose there are just two firms, 1 and 2, in the oil market and the inverse demand for oil is given by P = 90 – 3Q. The marginal cost for each firm is €18. Calculate the level of output that each firm would produce at the Cournot equilibrium.
Suppose there are just two firms, 1 and 2, in the oil market and the inverse demand for oil is given by P = 90 – 3Q. The marginal cost for each firm is €18. Calculate the level of output that each firm would produce at the Cournot equilibrium.
Chapter9: Monopolistic Competition And Oligoply
Section: Chapter Questions
Problem 18SQ
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A)
Suppose there are just two firms, 1 and 2, in the oil market and the inverse
Calculate the level of output that each firm would produce at the Cournot equilibrium.
B)
Suppose there are just two firms, 1 and 2, in the oil market and the inverse demand for oil is given by P = 60 – Q. The marginal cost for each firm is €36.
What price should Firm 1 charge at the Cournot equilibrium?
C)
Consider the production function Q = 10KL. Will the MRTS for this production function remain constant along the Q = 200 isoquant? Explain briefly.
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