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Cournot Competition The market demand for a good is represented by P = 400 ? 20Q....

Cournot Competition The market demand for a good is represented by P = 400 ? 20Q. Firms are symmetric with cost functions C = 30q. Assume the firms compete in a Cournot Oligopoly (i.e., simultaneous choices of quantity). (d) Compute prices quantities, and consumer surplus under perfect competition in which each firm in the market takes price as a given. (e) Now, think of a case where there are N firms. What are equilibrium prices and quantities, and how do they depend on N? As N rises, what happens to consumer surplus? [Hint: compare to your response in part d].

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