4. Suppose there are J identical firms, that entry by additional firms is effectively blocked, and...

 

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4. Suppose there are J identical firms, that entry by additional firms is effectively blocked, and that each firm has identical costs, C(q) = cq. Let inverse market demand be the linear form, p = a - b-14, where a > 0, b>0. j=1 (a) (10%) Show that the Cournot-Nash equilibrium outputs are the same for all firms. (b) (10%) Show that perfect competition is a limit case of imperfect competition. 4. Suppose there are J identical firms, that entry by additional firms is effectively blocked, and that each firm has identical costs, C(q) = cq. Let inverse market demand be the linear form, p = a - b-14, where a > 0, b>0. j=1 (a) (10%) Show that the Cournot-Nash equilibrium outputs are the same for all firms. (b) (10%) Show that perfect competition is a limit case of imperfect competition.

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4 a CournotNash equilibrium outputs for identical firms Inverse demand ... View the full answer