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6 Cournot with N Firms - 2 points Consider an industry with N firms that face the inverse demand, p(Y) = 10 - Y, where

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6 Cournot with N Firms - 2 points Consider an industry with N firms that face the inverse demand, p(Y) = 10 - Y, where Y - My Suppose that each firm's total cost function is TC(y) - 2y. The firms have no fixed costs. (a) Find the individual and aggregate production and the price in Cournot-Nash equilibrium. (1/2 point) (b) In the graph with N for the horizontal axis and p for the vertical axis, plot the equilibrium price. What can you say about the price as N goes to infinity? (1/2 point) (e) In the graph with N for the horizontal axis and Y for the vertical axis, plot the equilibrium aggregate production level. What can you say about the aggregate production level as N goes to infinity? (1/2 point) (d) In the graph with N for the horizontal axis and DWL for the vertical axis, plot the equilibrium DWL. What can you say about the DWL as N goes to infinity? (1/2 point) 6 Cournot with N Firms - 2 points Consider an industry with N firms that face the inverse demand, p(Y) = 10 - Y, where Y - My Suppose that each firm's total cost function is TC(y) - 2y. The firms have no fixed costs. (a) Find the individual and aggregate production and the price in Cournot-Nash equilibrium. (1/2 point) (b) In the graph with N for the horizontal axis and p for the vertical axis, plot the equilibrium price. What can you say about the price as N goes to infinity? (1/2 point) (e) In the graph with N for the horizontal axis and Y for the vertical axis, plot the equilibrium aggregate production level. What can you say about the aggregate production level as N goes to infinity? (1/2 point) (d) In the graph with N for the horizontal axis and DWL for the vertical axis, plot the equilibrium DWL. What can you say about the DWL as N goes to infinity? (1/2 point)

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