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Q. Consider ?the ?following ?market ?for ?a ?single ?good ?X ?with? two? firms ?that compete ?via? price? (Bertrand).?You? are ?given ?that ?P?=?30-3Q.
a) ?Suppose ?initially ?that ?both ?firms ?have ?unlimited? capacities ?and? marginal? cost? of? 3.?What ?is? the? resulting? equilibrium? price? and ?total?quantity? in? the ?market? ??Prove ?your? answer.
b) ?Now? suppose? that? the ?first ?firm? has? a ?capacity ?of ?2 ?and? the? second? firm? has ?a ?capacity ?of ?4.? What? is? the? resulting ?equilibrium ?price?and? quantity? for? each? firm ?and? for ?the? market? as ?a? whole??Prove ?your ?result.
Gains from trade will result if a country specializes.
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Indicate if GDP is affected, under what category and what happens to GDP Oklahoma cleans up after a devastating tornado.
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