Final answer:
The Cournot equilibrium for n firms changes when firms face a fixed cost and constant marginal cost per unit. Each firm's best-response function would be to produce a quantity such that marginal cost equals marginal revenue. The profit-maximizing quantity for each firm in this case would take into account both fixed costs and variable costs.
Step-by-step explanation:
The Cournot equilibrium for n firms changes when each firm faces a fixed cost of F as well as a constant marginal cost per unit. In this case, each firm's best-response function with fixed costs would be to produce a quantity such that marginal cost equals marginal revenue (MC = MR).
To find the Cournot equilibrium, we need to determine the optimal quantity for each firm in the market. One way to do this is by solving for a Nash equilibrium, where each firm's best response is to choose a quantity given the quantities of other firms. In the case of a Cournot duopoly (2 firms), the quantity each firm produces is half of the quantity that would be produced in a monopoly.
With fixed costs, the firms' profit calculations would need to take into account both the fixed costs and the variable costs. The profit-maximizing quantity for each firm would be the quantity that maximizes the difference between total revenue and total cost, taking into account the fixed costs as well as the variable costs.