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Economics

Consider a market that consists of n = 2 identical firms. Each firm produces output at a constant average and marginal cost of 2. The market demand curve in this industry p = 20 - 2Q, where Q is market demand and p is price. Firms will choose output simultaneously.

a. Find the symmetric Nash equilibrium.

b. Show that as n becomes large the market output in this industry will approach the level of output under perfect competition

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9694867

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