An industry has firms in Cournot competition, each with zero fixed cost and constant marginal cost . The product is homogeneous and the inverse demand is . The market price under Cournot-Nash equilibrium is equal to ________ (in integer).
IIT JAM 2024 Question 55: Monopolistic competition and oligopoly
Answer and worked solution
Checking your account…
Plain-text version
An industry has 6 firms in Cournot competition, each with zero fixed cost and constant marginal cost 20. The product is homogeneous and the inverse demand is P = 230 - Q. The market price under Cournot-Nash equilibrium is equal to (in integer).
Monopolistic competition and oligopoly has come up 104 times in 7 exams since 2004.
What this question tests
This question is on Cournot competition, part of Monopolistic competition and oligopoly in Microeconomics.
Firms choosing quantities simultaneously, reaction curves, and equilibrium as the number of firms or costs change.
TestStop has 31 past-paper questions on this subtopic; the nearest in year are below.
Similar questions from other papers
- The following two characteristics define a particular type of market: A. Close substitute products are sold by firms; B. Free entry and exit of firms. Select the…
- Two companies, Company 1 and Company 2, are playing a simultaneous-move game. They are selling competing devices, whose quantity demanded are given by x₁ and x₂, and…
- A duopoly market has demand P=120-0.6Q with Q=Q₁+Q₂, and cost functions C₁=6Q₁ and C₂=0.5Q₂², where P is unit price, Cᵢ is the cost function and Qᵢ is the output of…
- Which of the following is not an assumption of Monopolistic Competition?
- The Kinked demand curve model can explain (A) the level at which price will be set by firms to maximize profits. (B) the level of price at which the kink will occur as…
Question from the IIT JAM 2024 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.