Let the market price for an oligopoly of 4 firms be where Q the sum of all firms output All of...
Question:
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
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View this answerFirm 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...
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Oligopoly Competition: Definition & Examples
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Chapter 4 / Lesson 16
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Learn what an oligopoly is and its market effects, and view examples of oligopolies. Understand non-price competition and how oligopolies affect price competition.
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