Superb Professors

All firms in a Cournot monopolistically competitive industry have
the same cost function C(q)  25 10q. Market demand is Q  110 − p.
-(i)  Calculate the equilibrium price, firm output, total output and number of firms in the industry for a long run equilibrium.
-(ii)  Draw the optimal pricing equation as a function of n and the average cost function as a function of n.
-(iii)  How would these values change if a franchise tax of $75 were imposed on each firm? In other words how would these values change if the fixed costs increased by $75? Use your drawing in part (ii) to help answer this question.
 
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The post All firms in a Cournot monopolistically competitive industry have the same cost function C(q)  25 10q. Market demand is Q  110 − p. appeared first on Superb Professors.

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