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Question: three 3 identical firms produce widgets each firm faces a...

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Three (3) identical firms produce widgets. Each firm faces a constant marginal cost of

$10 per widget, and has fixed costs of $15,000. The firms compete by selecting quantities (Cournot Competition). Inverse demand in the market is given by the equation,

 

P = 50 - (Q/100)

 

where represents the market price and is the total quantity produced by the three firms.

 

Question: Derive the profit function for the typical firm.  (Hint: Use   to represent the combined production of the remaining two firms.)

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