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5. Deduce the Optimal price Charged by each rm. How does this Optimal price relate to the degree of competition? In country A, the car

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5. Deduce the Optimal price Charged by each rm. How does this Optimal price relate to the degree of competition? In country A, the car industry is made of n symmetric rms, selling in total Q = 900000 units. Firms can freely enter the market, but each rm is the single producer of its variety, and produces one single variety. The demand function for a given producer is: _ 1 1015 qQ(n 30000) Where p is used to denote the price the rm charges, and f) the average price on the market. We assume that rms are too small to affect 33. The cost function for each rm is: (:01) = 750000000 + 5000

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