Many countries provide funding for small companies to start or expand their businesses. In the European Union,

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Many countries provide funding for small companies to start or expand their businesses. In the European Union, subsidies take the form of grants, loans, and guarantees. In Question 4.1, duopoly quantity-setting firms face the inverse market demand curve, \(p=100-5 Q\), where \(Q=q_{1}+q_{2}\), and each has a constant marginal cost, \(M C=10\). How does the equilibrium change if only Firm 1 receives a subsidy of 3 per unit, and if both firms receive subsidies of 3 per unit? A

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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