Explore BrainMass
Share

Explore BrainMass

    Oligopoly

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Consider an oligopoly in which the inverse function p(?xi) = a - b ?xi, a, b > 0, and each firm's costs c(xi) = cxi, 0 < c < a. First, given n, determine the Cournot-Nash equilibrium outputs, profits, deviation of price from marginal cost, and deadweight loss. Then prove that all of these approach zero asymptotically as n tends towards infinity. Comment on the significance of these results.

    © BrainMass Inc. brainmass.com October 10, 2019, 2:42 am ad1c9bdddf
    https://brainmass.com/economics/oligopoly/oligopoly-inverse-functions-389571

    Solution Summary

    The solution calculates the profit and equilibrium of oligopolistic competition with infinitely many firms.

    $2.19