e. Suppose there are four firms in the industry competing as Cournot oligopolists. Find the profit-maximizing output, price, and profit for each firm. f. Compare industry price and total industry profit in each of the above three cases.

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter11: Profit Maximization
Section: Chapter Questions
Problem 11.9P
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I really need your help with the question E and F. Please solve it because it is really important for me... I need to understand the questions... If it is so complex, you can just solve E or just F. Please I need the solution for them asap... Thank you!

Question 1:
Consider a production function with two inputs, capital (k) and labor (1), given by
f(k,1) = kP + Lº
where p < 1,p # 0. Price per unit of each input is given by r for capital and w for labor.
a. Compute the total cost function C(r,w,q)
b. Now suppose p = Rewrite the total cost function C(r,w, q) for this case.
Suppose inverse demand for output is given by p = 2000 -;
25
Consider the following different industry structures, but each firm in the industry has the same
cost curve as in part (b) above.
c. Suppose there is only one firm in the industry (monopoly). Find the profit-maximizing
output, price, and profit.
d. Suppose there are two firms in the industry (duopoly) competing as Cournot
oligopolists. Find the profit-maximizing output, price, and profit for each firm.
e. Suppose there are four firms in the industry competing as Cournot oligopolists. Find the
profit-maximizing output, price, and profit for each firm.
f. Compare industry price and total industry profit in each of the above three cases.
Transcribed Image Text:Question 1: Consider a production function with two inputs, capital (k) and labor (1), given by f(k,1) = kP + Lº where p < 1,p # 0. Price per unit of each input is given by r for capital and w for labor. a. Compute the total cost function C(r,w,q) b. Now suppose p = Rewrite the total cost function C(r,w, q) for this case. Suppose inverse demand for output is given by p = 2000 -; 25 Consider the following different industry structures, but each firm in the industry has the same cost curve as in part (b) above. c. Suppose there is only one firm in the industry (monopoly). Find the profit-maximizing output, price, and profit. d. Suppose there are two firms in the industry (duopoly) competing as Cournot oligopolists. Find the profit-maximizing output, price, and profit for each firm. e. Suppose there are four firms in the industry competing as Cournot oligopolists. Find the profit-maximizing output, price, and profit for each firm. f. Compare industry price and total industry profit in each of the above three cases.
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