1. Bertrand duopolists, Firm 1 and Firm 2, face inverse market demand P = 50 - Q. Both have marginal cost, MC = $20. Calculate the equilibrium price in the market, the equilibrium output and the social welfare.
2. The market demand of Cobalt is given by Q= 200 - P. The industry consists of a dominant firm, Braeutigam Cobalt (BC) which has a marginal cost of $40, and 9 competitive fringe firms. The total cost of each competitive firm is C(q)=40q+5q^2.
a. What is the supply curve of the competitive fringe firm?
b. Find the market price, the output produce by each firm, and the Braeutigam Cobalt market share.
3. A monopolistic competitive industry consists of N identical firms. The marginal cost of each firm is $10 and the fixed cost of each firm is $50. The market demand of each firm is given by (Q=100-2p+p)/n where p is the firm own price, pis the average market price, and N is the number of firms.
a. Assume there are currently 60 firms in the industry. Find the market price, the quantity produce and the profit of each firm.
b. What is the number of firms in the long run equilibrium?