Consider a Bertrand oligopoly consisting of four firms that produce an identical

Question

Consider a Bertrand oligopoly consisting of four firms that produce an identical product at a marginal cost of $220. The inverse market demand for this product is P = 500 -5Q.

a. Determine the equilibrium level of output in the market.


b. Determine the equilibrium market price.


c. Determine the profits of each firm. Consider a Bertrand oligopoly consisting of four firms that produce an identical product at a marginal cost of $220. The inverse market demand for this product is P = 500 -5Q.

a. Determine the equilibrium level of output in the market.


b. Determine the equilibrium market price.


c. Determine the profits of each firm. Consider a Bertrand oligopoly consisting of four firms that produce an identical product at a marginal cost of $220. The inverse market demand for this product is P = 500 -5Q.

a. Determine the equilibrium level of output in the market.


b. Determine the equilibrium market price.


c. Determine the profits of each firm. Consider a Bertrand oligopoly consisting of four firms that produce an identical product at a marginal cost of $220. The inverse market demand for this product is P = 500 -5Q.

a. Determine the equilibrium level of output in the market.


b. Determine the equilibrium market price.


c. Determine the profits of each firm.

Explanation / Answer

at bertrand oligopoly ,

at equilibrium

P = MC

500-5Q=220

Q = (500-220)/5 = 56 unit

eqm level of market price = 500-5Q = 500-5*56 = $220

profit of each firm will be zero, because there will be a price war among each firm in bertrand oligopoly

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.