There are 19 firms in a cournet model. All firms in the cournot industry have the same cost function C(q) = 25+10q. Market demand is Q=110-p.
i) Calculate the equilibrium price and quantity?
ii) What if technical innovation were to reduce unit production costs by $5? Calculate equilibrium price and quantity?
Part (i) Cost, TC = 25+10q; MC = 10 Q = 110 - P; TR = p*Q; TR = 110p - P 2 ;MR = 110 - 2p; in equilibrium MC = MR ; 10 = 110... View the full answer