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Unformatted text preview: in equilibrium? c) Suppose that the two firms are Cournot duopolists. Using the reaction functions of the two firms, calculate industry output and profit. 2) An incumbent firm wishes to deter entry into the industry by threatening to inflict losses on any firm that enters. Under what circumstances will the threat be credible? Key terms to revise and understand: Monopolistic competition Cournot/Nash equilibrium Prisoners dilemma Bertrand equilibrium Entry deterrence Decision tree...
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This note was uploaded on 03/15/2012 for the course EC 111 taught by Professor Timhatton during the Spring '12 term at Uni. Essex.
- Spring '12