Suppose that the market demand for expensive steak dinners is given by: Q = 1,000−10P, so...

Suppose that the market demand for expensive steak dinners is given by:

Q = 1,000−10P,

so that the marginal revenue is:

MR = 100−0.2Q,

where Q is the number of steak dinners per day and P is the price of a dinner. The marginal cost and average total cost are both constant and equal to $40 per dinner.

Suppose that there is only one firm in the market.

Suppose that a second firm that produces identical steaks and has identical costs enters the market and acts according to the Cournot oligopoly model.

The equilibrium price is?

The total equilibrium quantity is how many dinners?

Each firm's economic profit is?

Solutions

Expert Solution

Rahul Sunny answered 2 weeks ago

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Suppose that the market demand for expensive steak dinners is given​ by: Q = 1,000−10P​, so...

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Suppose that the market demand for expensive steak dinners is given by: Q = 1,000−10P, so...