Determination of the Cournot - Nash Equilibrium Outputs
Business & Finance, Economics, Microeconomics
| Author: | Homework Help Classof1 | ISBN: | 1230000150051 |
| Publisher: | Classof1 | Publication: | July 10, 2013 |
| Imprint: | Language: | English |
| Author: | Homework Help Classof1 |
| ISBN: | 1230000150051 |
| Publisher: | Classof1 |
| Publication: | July 10, 2013 |
| Imprint: | |
| Language: | English |
Consider an Oligopoly in which the inverse demand function p ( N on top) Σ (I = 1 below) Xi on the right side) = a – b ( N on top) Σ (I = 1 below) Xi on the right side), a, ,b, > 0 and each firms costs c(xi) = cxi, 0 < c < a. First, given n, determine the cournot-nash equilibrium outputs, profits, deviation of price from the marginal cost and deadweight loss, then prove that all of these approach zero asymptotically as N tends towards infinity. Comment on the significance of this result.
Consider an Oligopoly in which the inverse demand function p ( N on top) Σ (I = 1 below) Xi on the right side) = a – b ( N on top) Σ (I = 1 below) Xi on the right side), a, ,b, > 0 and each firms costs c(xi) = cxi, 0 < c < a. First, given n, determine the cournot-nash equilibrium outputs, profits, deviation of price from the marginal cost and deadweight loss, then prove that all of these approach zero asymptotically as N tends towards infinity. Comment on the significance of this result.
