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Consider a market with n = 2 firms, where the demand for the product of firm i is given by qi = a – bpi + c times summation of pj, where a, b > 0 while c can be either positive or negative. Firms compete in prices. Suppose that all the firms have the same constant marginal costs. Find the equilibrium. How does it change with c and n? Under what condition(s) does this equilibrium exist? Suppose now that the firms have constant but di§erent marginal costs. Find the equilib- rium. What are the conditions that determine the number of firms in the market? Do the most e¢cient firms operate in the market, or are there equilibria in which less e¢cient firms operate while some more e¢cient ones do not?