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Assume that there are 4 firms in a Cournot oligopoly game. Let qi denote the quantity...

Assume that there are 4 firms in a Cournot oligopoly game. Let qi denote the quantity produced by firm i, and let q = q1 + q2 + q3 + q4 denote the aggregate quantity on the market. Let P be the market clearing price and assume that the market inverse demand equation is P(Q) = 80 – Q. The total cost of each firm i from producing quantity qi is Ci(qi) = 20qi. The marginal cost, 20, is constant and there are no fixed costs. Assume that the firms choose their quantities simultaneously.

What is the equilibrium in this game if all firms are assumed to have the same output? Explain your reasoning.

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