Academic help online

A homogeneous products oligopoly consists of four firms, each of which has a constant marginal cost MC = 5. The market demand curve is given by P = 15 – Q.
a) What are the Cournot equilibrium quantities and price? Assuming that each firm has zero fixed costs, what is the profit earned by each firm in equilibrium?
b) Suppose Firms 1 and 2 merge, but their marginal cost remains at 5. What are the new Cournot equilibrium quantities and price? Is the profit of the merged firm bigger or smaller than the combined profits of Firms 1 and 2 in the initial equilibrium in part (a)? Provide an explanation for the effect of the merger on profit in this market

All Rights Reserved, usbestwriters.com
Disclaimer: You will use the product (paper) for legal purposes only and you are not authorized to plagiarize. In addition, neither our website nor any of its affiliates and/or partners shall be liable for any unethical, inappropriate, illegal, or otherwise wrongful use of the Products and/or other written material received from the Website. This includes plagiarism, lawsuits, poor grading, expulsion, academic probation, loss of scholarships / awards / grants/ prizes / titles / positions, failure, suspension, or any other disciplinary or legal actions. Purchasers of Products from the Website are solely responsible for any and all disciplinary actions arising from the improper, unethical, and/or illegal use of such Products.