Cournot Oligopoly Consider the Cournot model of Sect XXXXXXXXXXbut now assume that there are n firms instead of two. Each firm  and the market price is Each firm still has marginal cost and no fixed...

Cournot Oligopoly

Consider the Cournot model of Sect. 6.2.1 but now assume that there are n firms instead of two. Each firm
 and the market price is

Each firm still has marginal cost
and no fixed costs.

(a) Formulate the game corresponding to this situation. In particular, write down the payoff functions.

(b) Derive the reaction functions of the players.

(c) Derive a Nash equilibrium of the game by trying equal quantities offered. What happens if the number of firms becomes large?

(d) Show that the Nash equilibrium found in (c) is unique.