Consider a market with n ≥ 2 firms engaged in Cournot competition. The firms’ cost functions,...

Consider a market with n ≥ 2 firms engaged in Cournot competition. The firms’ cost functions, and the market demand function are C(q)= 10q and D(p)= 100-p respectively

(a) Find the equilibrium quantity and price, the consumer surplus, and the prof- its of each firm.
1. (b) How much total surplus is lost due to market power?
2. (c) What happens to the equilibrium quantity, price, and dead-weight loss when the number of firms grows to infinity?

Expert Solution

Rahul Sunny answered 1 month ago

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