Define the profit maximization problem

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In a market that operates under quantity competition there are 9 firms (Cournot oligopoly). The inverse demand function is P = 320 - 2 Q. All firms share the same cost structure, that is given by C(qi) = 200 + 20 qi + 5 qi^2.

Define the profit maximization problem that every firm faces and solve for the best response function. Use this (or the first order condition directly) to answer the following:

The Nash Equilibrium quantity produced by each firm q*, P*, and Lerner index is?

Reference no: EM132791742

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