Question

Three oligopolists operate in a market with inverse demand given by p(q) = a q, where q = q1 + q2 + q3 and qi is the quantity produced by firm i. Each firm has a constant marginal cost of production c, and no fixed cost. The firms choose their quantities as follows; (1) firm 1 chooses q0; (2) firms 2 and 3 observe q1 and then simultaneously choose q2 and q3, respectively. What is the spe

Answer 1

oligopolists operate in a market with inverse demand given by p(q) = a q, where q = q1 + q2 + q3 and qi is the quantity produced by firm i. Each firm has a constant marginal cost of production c, and no fixed cost. The firms choose their quantities as follows; (1) firm 1 chooses q0; (2) firms 2 and 3 observe q1 and then simultaneously choose q2 and q3, respectively