Monopoly producer of this product. Assume that the inverse demand function for this product is: P(Q) = 800 − Q and your cost functions are TC(Q) = 50Q; MC(Q) = 50. What is the MR function? What is the profit-max quantity and price? What is the MR at that level of output? What is the Monopoloy pofit? What is the "efficient" level of production? What is the price at the e?cient level? Graph the marginal revenue, marginal cost, and demand curves, and show the area that represents deadweight loss due to monopoly on the graph. Calculate the amount of deadweight loss.
Another firm has entered the market.
Assume this ?rm faces the same costs of production as you do, and that the market demand is the same except that now, Q = Q 1 + Q 2 . Suppose that you and this other ?rm play “Cournot”. Write the marginal revenue functions of each ?rm as functions of Q 1 and Q 2 What are the “best-response” functions for each ?rm? Cournot equilibrium: . What is the market price? What are the pro?ts for each firm?
Hello, the second part of the question is what I need help with. Not sure I understand how to do the "Cournot" and best response once another firm enters the market and its no longer a monopoly