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Consider a model of increasing returns to scale with symmetric firms. a) Algebraically show what the equilibrium number of firms, price, and average cost must
Consider a model of increasing returns to scale with symmetric firms. a) Algebraically show what the equilibrium number of firms, price, and average cost must be, in terms of their equations. You may start from the equations relating price to the number of firms p= c + (1fb*n) and average cost to the number of firms AC. = Fn I (S+c). c- is constant marginal cost b - is constant term representing the responsiveness of a fiers sales to its price n- is the number of firms in industry F - fixed cost 5- he total sales of the industry (aka market size)
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