Question: Consider a market with the inverse demand function , P = 14.5 - Q. Assume that all potential firms for this market have access the

Consider a market with the inverse demand function , P = 14.5 - Q. Assume that all potential firms for this market have access the same technology and input prices, which imply the following individual firm cost function: C=1.96+12qC=1.96+12q .

Solve for the Cournot equilibrium level of profits, assuming there are N firms in competition.

Assuming a zero-profit entry condition, how many firms can be supported in the market?

What is the HHI in this situation?

What is the CR4?

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