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Impact of increase in MC on each firm's equilibrium output and profits in Cournot duopoly & Sweezy oligopoly model.

Consider a homogeneous-product duopoly where each firm initially produces at a constant marginal cost of $100 and there are no fixed costs. Describe what would happen to each company's equilibrium output and profits if firm's marginal cost increased to $110 but firm 1's marginal cost remained constant at $100 in each of the following settings:

a. Cournot duopoly

b. Sweezy oligopoly

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M922886

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