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Consider a market with 4 firms, each facing the same (inverse) demand function given by p...

Consider a market with 4 firms, each facing the same (inverse) demand function given by p = ( 6 − q/50 if q > 200 4.5 − q/200 if 0 ≤ q ≤ 200 If there is a drop in one of the firm’s marginal cost from c = $3 to c = $2, do you think this firm would greatly increase its sales? Explain!

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Rahul Sunny answered 2 years ago
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