Consider a Bertrand oligopoly consisting of four firms that produce an identical product at a marginal cost of $260. The inverse market demand for this product is P = 500 -3Q.
TR = PQ = 500Q-3Q2
MR = dTR/dQ= 500-6Q
MR = MC
500-6Q = 260
=> Q = 40
P = 500-3*40 = 380
a. Determine the equilibrium level of output in the market:
b. Determine the equilibrium market price:
c. Determine the profits of each firm:
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