Question: problem 3 cournot competition and pricecost marginthe demand for a...
Problem 3: Cournot Competition and Price-cost Margin.The demand for a product is Q=a−P/2. If there are 4 firms in an industry and marginal cost is MC= 20, then the price in Nash equilibrium is P= 56. What is a?
where n is the number of firms, and μ is the absolute value of the elasticity of demand.