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Problem 3. The market for a new carbohydrate-free strand of rice is served by three firms, AsiaRice, Ben's Rice, and CountryRice (or A, B, and
Problem 3. The market for a new carbohydrate-free strand of rice is served by three firms, AsiaRice, Ben's Rice, and CountryRice (or A, B, and C). These firms are engaged in (simultaneous) Cournot competition. Total demand for a ton of carb-free rice is described by P = 4000-Q, where Q is the total quantity produced by all firms in the market. The three firms have an identical total cost function Ci(qi) = 400qi for i = {a, b, c}. 1. Write AsiaRice's profit as a function of the quantities produced by each firm da, 9b, and qc? 2. What is the best response function of AsiaRice? 3. Suppose (for this part only) that Ben's Rice faces a lower marginal cost of 200. So it's total cost function is Co(qb) = 200q . Would your answer to part 2 change? Why or why not
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