Three firms share a market. The demand function is P(q1, 92, 93) = 10 – q1 – 92 – 93, where q; is the output of firm i, Player i. The marginal cost per unit for each firm is zero. Suppose firm 1 is a market leader, and that firm 2, and firm 3 choose q2 and q3 simultaneously after observing q1 Find the SPE of this game. How much is produced by firm 2? Numerical answer How much is produced by firm 1, 2, and 3?

Three firms share a market. The demand function is P(q1, 92, 93) = 10 – q1 – 92 – 93, where q; is the output of firm i, Player i. The marginal cost per unit for each firm is zero. Suppose firm 1 is a market leader, and that firm 2, and firm 3 choose q2 and q3 simultaneously after observing q1 Find the SPE of this game. How much is produced by firm 2? Numerical answer How much is produced by firm 1, 2, and 3?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.7P

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