Answer to Question #73648 in Economics for Jony Darlong

Question #73648
Consider an industry with three firms each having marginal costs equal to zero. The inverese demand curve facing thos industry is P(q1,q2,q3)=60-(q1+q2+q3)
a) If each firm behaves as a cournot competitor, what is firm 1's best response function?
b) Calculate cournot equilibrium of this problem.
c) Firms 2 and 3 decide to merge and form a single firm (MC is still zero). Calculate the new industry equilibrium and comment on combined profits from firms 2 and 3 considering pre and post meger profits
0
Expert's answer

Answer in progress...

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS