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What about if competition is cournot postentry

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1. Suppose that the demand curve is P = 9 - Q and the costs of production are C = q2 + 9. The marginal cost function is MC = 2q.

(a) What are the second-best-where P = AC and the market clears-price and output?

(b) Could an entrant profitability enter by undercutting the incumbent? How?

(c) Is the natural monopoly sustainable? What about if competition is Cournot postentry?

Reference no: EM13874439

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