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Question: in the ethanol industry each firm chooses what output to...

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In the ethanol industry, each firm chooses what output to produce and price is determined by aggregate output. Market demand is given by Q 1500-2p, where Q is in million tons and p is in 8/ton. There are two producers and their marginal costs are constant at c 340 and c2 420 (both in S/ton) (a) Determine equilibrium price, output, and market shares. (b) Firm 2 is considering a capital investment of $4.9 billion that would reduce marginal cost = 380 $/ton. Is this investment worthwhile? Explain

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