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Unformatted text preview: => Q1* = 90/(1+n) By symmetry, we conclude: Qi* = 90/(1+n) for all firms I In our model of perfect competition, we know that the total market output Q = 90 , the zero profit quantity. In the n firm case, Q is simply the sum of all Q i * . Because all Q i * are equal due to symmetry: Q = n * 90/(1+n) As n gets larger, Q gets closer to 90, the perfect competition output. The limit of Q as n approaches infinity is 90 as expected. Extending the Cournot model to the n firm case gives us some confidence in our model of perfect competition. As the number of firms grow, the total market quantity supplied approaches the socially optimal quantity....
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- Fall '08