Find the cournot equilibrium

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1. Market demand is given by P = 140 -Q. There are two firms, each with unit costs = $20. Firms can choose any quantity. Find the Cournot equilibrium and compare it to the monopoly outcome and to the perfectly competitive outcome. Why aren't the latter equilibrium of the market game?

2. What is the outcome of the oligopoly in number 7 as the number of firms grows large? Why will this number of firms grow large? Is this outcome a tragedy?

Reference no: EM13895992

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