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Heterogeneous-cost Cournot Competition (view source)
Revision as of 18:29, 11 November 2013
, 18:29, 11 November 2013no edit summary
Prices always come from the demand function. Firm's don't make profits by setting prices, they make profits by providing less than competitive quantities. Accordingly first find the total quantity provided:
:<math>Q^* = \sum_{i=1}^n q_i^* = \frac{\left ( nA - \sum_{i=1}^n c_i \right )}{B (n+1)}</math>
And then substitute into <math>\;p=A-BQ</math> to get:
