Three firms compete in the style of Cournot

Economics Feb 06, 2022

Three firms compete in the style of Cournot. The market demand is given by Q(P) = 9 - P. There are no fixed cost and each firm s marginal cost is constant. Firm 1's marginal cost is MC1 = 1, firm 2's marginal cost is MC2 = 2. Let MC3 be the marginal cost of Firm 3. All three firms will produce a strictly positive quantity in the Nash equilibrium if and only if MC3 < 3. MC3 > 4. MC3 < 1. MC3 < 4. MC3 < 2.