Business, 05.12.2019 23:31 editsa

Assume there currently exists a monopolistically competitive industry with 21 firms, and that total revenue (price * quantity) for firm #1 is [(180 - 0.2σqj) - q1] * q1 where q1 represents the output of firm 1, and the qj (j = 2,3, ,21) represent the outputs of its 20 competitors. assume that each firm has the identical total cost function tc = 0.5q3 - 21q2 + 300q 1. derive the expression for firm 1’s marginal revenue (mr1) assuming – albeit inconsistently – that both: (a) like any cournot-type competitor, firm 1 ignores the indirect effects of its output choice [cvs equal to zero], and (b) all other 20 firms will produce the same quantity as firm 1. 2. when setting this mr1 equal to marginal cost, what is the corresponding short run profit-maximizing level of output for firm 1? 3. at this (common) output level, what price will firm 1 charge?

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Assume there currently exists a monopolistically competitive industry with 21 firms, and that total...

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