There are three identical firms in the market research industry. The demand is 1 – Q, where Q = q1 + q2 + q3. The marginal cost is zero. b. Show that if two of the three firms merge (transforming the industry into a duopoly), the profit of these firms decreases. Explain why and use a table to show the changes.
There are three identical firms in the market research industry. The demand is 1 – Q, where Q = q1 + q2 + q3. The marginal cost is zero. b. Show that if two of the three firms merge (transforming the industry into a duopoly), the profit of these firms decreases. Explain why and use a table to show the changes.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter24: Monopolistic Competition, Oligopoly, And Game Theory
Section: Chapter Questions
Problem 9QP
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2) There are three identical firms in the
b. Show that if two of the three firms merge (transforming the industry into a duopoly), the profit of these firms decreases. Explain why and use a table to show the changes.
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