Re: MICro: cost curves for two plants

Posted by Amit Goyal on Jun 05, 2013; 3:06pm
URL: http://discussion-forum.276.s1.nabble.com/MICro-cost-curves-for-two-plants-tp7581776p7581806.html

If you want to maximize joint profits, then both firms entering would mean that they both incur fixed costs and since only one of the firm will operate post entry (as we have seen above) so it does not make any sense for the other firm to enter. So, we compute profits for both and compare them.
Regarding your other query, you are right. There is a typo in my answer. The price is indeed 31 and not 32.