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Questions › JNU › JNU SIS 2021 › Q87
0 marksMicroeconomics › Monopolistic competition and oligopoly › Cournot competitionHardabout 3 min

JNU SIS 2021 Question 87: Monopolistic competition and oligopoly

Consider a Cournot oligopoly with n firms, and (inverse) demand function P=200−∑i=1nqiP = 200 - \sum_{i=1}^{n} q_iP=200−∑i=1n​qi​ where P represents the market price and qiq_iqi​ is firm i's output. Let the MC (marginal cost) be 40. Then the overall industry output lies in the interval

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Consider a Cournot oligopoly with n firms, and (inverse) demand function P = 200 - Σᵢ₌₁ⁿ qᵢ where P represents the market price and qᵢ is firm i's output. Let the MC (marginal cost) be 40. Then the overall industry output lies in the interval (A) [80, 160] (B) [40, 200] (C) [80, 100] (D) [70, 160]

Also written as: Consider a Cournot oligopoly with n firms, and (inverse) demand function P = 200 - sum_(i=1)^n q_i where P represents the market price and q_i is firm i's output. Let the MC (marginal cost) be 40. Then the overall industry output lies in the interval

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.

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