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Suppose there are many real and potential firms each with the same cost function C=y 2 +2. Suppose the market demand is a linear with
Suppose there are many real and potential firms each with the same cost function C=y2+2. Suppose the market demand is a linear with X(p)=10-p. Also, suppose that entry with discrete firms, no set-up costs and non-myopic firms (Varian's model). Calculate the long-run market price and long-run equilibrium number of firms m*.
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