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28 Sep 2019
Consider a single firm facing inverse demand function
p=100-10q
where q is the quantity of the good produced and p is the price for the good.
The firm has a linear cost function C(q)=10q.
Suppose now two firms are facing inverse demand function
p = 100 - 10Q
where Q=q_1 + q _ 2 is the total quantity of the good produced and p is the price for the good.
Each firm has linear cost function C(q) = 10q .
Compare the monopoly price in Q1, call it p^M, to the competitive equilibrium price in Q2, call it p^CE,
What is p^M - p^CE
Consider a single firm facing inverse demand function
p=100-10q
where q is the quantity of the good produced and p is the price for the good.
The firm has a linear cost function C(q)=10q.
Suppose now two firms are facing inverse demand function
p = 100 - 10Q
where Q=q_1 + q _ 2 is the total quantity of the good produced and p is the price for the good.
Each firm has linear cost function C(q) = 10q .
Compare the monopoly price in Q1, call it p^M, to the competitive equilibrium price in Q2, call it p^CE,
What is p^M - p^CE
Chika IlonahLv10
28 Sep 2019