How to use this app?
Optimal pricing rule in the Cournot Oligopoly setting: price elasticity, number of firms and market power
Optimal pricing rule in the Cournot Oligopoly setting: price elasticity, number of firms and market power
Welcome! Consider you run a company in an oligopoly market à la Cournot. You have information about consumers (you are aware of demand price-elasticity e) and of the number of competitors (n). You and your competitors have the same marginal cost c.
This app computes the optimal price, markup ratio and the Lerner Index in that situation. Input marginal cost, price elasticity and the number of firms in the left panel. The `Optimal price` tab shows the resulting price. Check the result using the `Lerner Index & Markup` tab.