Suppose there are (n) firms selling a homogeneous product at a constant marginal cost in a Cournot
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Suppose there are \(n\) firms selling a homogeneous product at a constant marginal cost in a Cournot market. The market demand curve is \(Q=100 / p\), where \(Q=n q\). What is the market elasticity of demand? What happens to the equilibrium price and market power when either marginal cost rises or the number of firms falls?
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The market elasticity of demand is where beta is the markup of ...View the full answer
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