Let the market price for an oligopoly of 4 firms be where Q the sum of all firms output All of...


Let the market price for an oligopoly of 4 firms be {eq}P = $210 - Q {/eq}, where {eq}Q {/eq} = the sum of all firms{eq}' {/eq} output = {eq}q_{1} + q_{2} + q_{3} + q_{4} {/eq}.

All of the firms have a cost per unit produced of $10, and no fixed costs. Each firm knows the price function ({eq}P {/eq}), and that the other firms have the same costs.

Firm 2 makes profit of _____.

Profit maximization

Profit maximization is the main objective of a rational producer. A firm attains its profit maximization condition where its marginal revenue intersects the marginal cost curve.

Answer and Explanation: 1

Become a member to unlock this answer!

View this answer

Firm 2 makes a profit of = $2500.

The price in oligopoly market is,

P = $210 - Q

where, Q = q1 + q2 + q3 + q4

i.e., the equilibrium quantity can...

See full answer below.

Learn more about this topic:

Oligopoly Competition: Definition & Examples


Chapter 4 / Lesson 16

Learn what an oligopoly is and its market effects, and view examples of oligopolies. Understand non-price competition and how oligopolies affect price competition.

Related to this Question

Explore our homework questions and answers library