Chemistry Reference
In-Depth Information
implying that
A
c
l
"
k
Q:
e
D
x
l
(5.138)
By summing these equations for all values of l,
NA
P
l
D
1
c
l
"
k
Q
D
N Q;
so firm k believes that the total production level of the industry is
NA
P
l
D
1
c
l
.N
C
1/"
k
Q
k
D
:
(5.139)
Therefore firm k will produce the output
A
.N
C
1/c
k
C
P
l
D
1
c
l
.N
C
1/"
k
A
c
k
"
k
Q
k
x
k
D
D
(5.140)
and the equilibrium price is believed to be
A
C
P
l
D
1
c
l
N
C
1
D
f
k
.Q
k
/
D
p
k
e
;
(5.141)
as a consequence of (5.138) with l
D
k and the particular form of the believed price
function f
k
. Notice that
p
k
is the same for all firms, that is, the expected equilibrium
e
prices are identical.
In reality the total production of the industry becomes
.A
C
!
;
X
N
X
N
X
N
X
N
1
N
C
1
1
"
k
.N
C
1/
c
k
"
k
Q
D
x
k
D
c
l
/
k
D
1
l
D
1
k
D
1
k
D
1
with actual market price
.A
C
!
: (5.142)
N
N
N
X
X
X
B
N
C
1
1
"
k
.N
C
1/
c
k
"
k
p
D
A
BQ
D
A
c
l
/
l
D
1
k
D
1
k
D
1
For firm k, the discrepancy between the actual and believed price is
NA
B.A
C
!
;
X
N
X
N
X
N
X
N
1
N
C
1
1
"
k
C
B.N
C
1/
c
k
"
k
p
k
D
p
e
p
k
D
c
l
/
c
l
lD1
kD1
kD1
lD1
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