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Suppose firms’ marginal and average costs are constant and equal to C, and that the inverse demand curve is given by P= a-bQ, where a, b, > 0.

A) Calculate profit maximizing Q if firms are perfect competitors. B) Calculate profit maximizing Q if the market is served by a monopolist.

C) Calculate Nash Equillibrium quantities for Cournot duopolists. What is the market output?

D) Calculate Nash Equillibrium quantities for Bertrand duopolists. What is the market output?

E) Suppose now there are n identical firms in a Cournot model. Compute the Nash equillibrum quantities as a function of n. Also compute market output?

F) Show that monopoly outcome can be reproduced by setting n = 1 in (E); that the Cournot duopoly can be reproduced by setting n = 2 in (E) and that the Bertrand duopoly can be reproduced by letting n →” role=”presentation” style=”display: inline-block; line-height: 0; font-size: 16.94px; overflow-wrap: normal; word-spacing: normal; white-space: nowrap; float: none; direction: ltr; max-width: none; max-height: none; min-width: 0px; min-height: 0px; border: 0px; padding-top: 1px; padding-bottom: 1px; position: relative;”>?$?$ INF.