Problem Sot #4. Qt] as ap sre C= lot2Q > pr 4- ge > me=2 » FC= 10 (A) & of firms. N= (a-me) [= -I ( Derivations of tus formula cee = (4-2) [iw lecture slides ) ~ fe - = 14 —— B2 firm Lueed production 2 marbet pre ; = wl ‘s = 2, Blo = qo C) 4 of firms ff market size doubles . “> N= (a- me) FE -) “When $ double , WN rneneases by less thon Je Thi disproportional vespente Is due te + Competition as TH of frm — Py.i—F, Fs 0 400 L = 40 Boo 1500 vay VP ~ tay VAD Demands of earh firm: Assume Hu margnral consumer (m) 1% locatid x1 Ldistame) from F,, 2 BoB Gk we IS = PPh. G00 2t 2 = Pk + 460, Then the alistame ketwoen m and Fa te. 400-2 = 460- Poh Demand for firm! (di) = 4oo4x= Lh +200 . “2 (dz) = 200 + (Go0-%) = bso- eb (B) Prre blasterty : ood PL} Ph __ _?- lh ap dy OE ae 4350 ~ APF Foot 23d BL he oP2 ds ~~ 24° bp— BR PP tBoor when dy The because whon transportation Coct 7, producs from detlenont firme ane Lece subetrhetable, hace demand 2 hecc arte , (ONE. Prius. if mc=20 | (©) React fns: (WD NE Pres ope. we She Pet ltoobie Yoo P= £300 + 450 OC: Sopa pe : St => p, = Pitidoctsnn Pr = B+ +20 Spr no => Pa= z_ mi Fs Fe Fors dove — L000/s N firms om a circle Aistonye between each pair = $92? Fe= 25° Mc = 20 Uy = ¥- Pe -t2y + =lo A) Demand for each firm The demond will he 2 +2%s for firme mM, ond M2 ane tu Margrnal Consumer Fy. ~ an | Es eppectie ne teat aol for Fo fe tw Be Hin zt 2 La = Pir Pe 4000/0) ne Oe | di = WAM. = Pia AP —2Po + 4000 /v/ Assume symmetry, Pry =P =P =P > di=dend =---2d = 2? | we (B) NG. Pre Max Te = (Pi -20) de -F = (Pp ~ 20) (Pevtfernafe + 4000.) -F => F.0-C. Me oo a Poa tPir +40, 2000+ . - 4 vy Accum symmetry p..=Pry =Po =P > Pa £0000 too. ©) H of firms Or the long run (oka , @uhbriue) We = CPe-2)de -F = (P-20)d-F =( 200 $3 9-20) 22 if Le 6 vs if L=0 > (8000¢00 - 269 > N = 4000 fi = $00 — 2.9.3 —