5 firms are competing la Stackelberg with 2 leaders and 3 followers. Each has identical...

 

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5 firms are competing à la Stackelberg with 2 leaders and 3 followers. Each has identical costs given by C(q)= 3q. The market demand for this good is given by P=30-Q/2. Find equilibrium price, quantities and profits. a) Based on question, calculate the Herfindahl-Hirshman Index (HHI hereafter) of this market. b)What would the HHI be if all 5 firms were to choose quantities simultaneously? Comment. 5 firms are competing à la Stackelberg with 2 leaders and 3 followers. Each has identical costs given by C(q)= 3q. The market demand for this good is given by P=30-Q/2. Find equilibrium price, quantities and profits. a) Based on question, calculate the Herfindahl-Hirshman Index (HHI hereafter) of this market. b)What would the HHI be if all 5 firms were to choose quantities simultaneously? Comment.