AC=MC=5 Q=95-P Firm one (Q1) Firm two (Q2) (answer the blank please :) suppose t

Question

AC=MC=5

Q=95-P

Firm one (Q1) Firm two (Q2)

(answer the blank please :)

suppose there are N firms in the industry, all with the same MC=5 As the N became large, the market price approach____?

thank you

Calculate the Cournot equilibrium (i.e., the values of Q1 and Q2 for which each firm is doing as well as it can given its competitor's output.). What are the resulting market price and profits of each firm? When competing, each firm will produce units of output. The market price will be s In turn, each firm will earn profit of $

Explanation / Answer

AC=MC=5

Q=95-P

Firm one (Q1) Firm two (Q2)

Calculate the Cournot equilibrium (i.e., the values of Qi and Qi for which each firm is doing as well as it can give its competitor's output). What are the resulting market price and profits of each firm?

When Competiting each firm will produce 30 units of output.

The maret price will be $35

In turn, each firm will earn profit of $900

suppose there are N firms in the industry, all with the same MC=5 As the N became large, the market price approaches perfectly competitve price.

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