What is the deadweight loss in this market

Reference no: EM131132315

Repeat worked-out problem 19.3 (page 742), but assume that Rebecca's marginal cost is $25 per cubic yard while Joe's is $40 per cubic yard.

Problem 19.3

Repeat worked-out problem 19.1 (page 712), but assume instead that Joe and Rebecca both have a marginal cost of $55 per cubic yard. What is the deadweight loss in this market?

Problem 19.1

Suppose Joe, Louie, and Rebecca compete in the Bertrand ready-mix concrete market described in Section 19.2. Show that in any Nash equilibrium, all sales must occur at a price of $40 (equal to marginal cost). Extend your argument to show that this statement will be true as long as two or more firms are competing in the market.

Reference no: EM131132315

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