N1

3) Your the head of a company that works with the government to launch space tech. Your company estimates that the worldwide market demand curve for space tech is Q = 30,000 - P/20. Including your company, there are a total of three firms in the rocket business, each with an MC of $300K per rocket launch.

c. What would the price be if the firm is a monopoly? If all 3 firms have monopoly prices and split them equally, what would their profits be?

d. For the next 5 years the firm will face this decision yearly Is there an equilibrium where all of the firms would set the monopoly price in the first year? Explain.

e. The three firms will decide prices yearly, what is the minimum discount factor using a grim strategy to set the monopoly price?