Question: Consider the model p = 9 Q Q = q1 + q2 + q3 TC1 = 3q1 TC2 = 2q2 TC3 = q3 (i)

Consider the model p = 9 − Q Q = q1 + q2 + q3 TC1 = 3q1 TC2 = 2q2 TC3 = q3

(i) Establish the Cournot equilibrium.

(ii) Plot trajectories from initial points where each firm is a monopolist.

(iii) Under the assumption that each firm maximises its profits under the conjectural variation that the other firms are holding their output levels constant, solve the system’s difference equations.

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