3. Consider a market with demand P(Q) = 100 - 3Q in which 14 identical firms compete. All firms face TC(Q) = 10Q. Let X
3. Consider a market with demand P(Q) = 100 - 3Q in which 14 identical firms compete. All firms face TC(Q) = 10Q. Let X = Q2 + Q3 + ... + Q14. (a) Write out the residual demand curve for firm 1 in terms of X and Q1. (b) Find the corresponding marginal revenue. (c) What is the reaction function for firm 1 (in terms of X). (d) Find the Cournot equilibrium (market quantity QM*, P*). (e) Determine profits for each firm. 3
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