We consider a Cournot oligopoly market of firms possessing increasing returns to scale technologies (which may not be … ering to subsidize one firm an amount which depends on the output level of that firm and the market price. The firms bid for … a price equal to its average cost (iii) Every other firm willingly exit the market and (iv) Market price decreases …

operators. The theoretical model shows that eliminating subsidies to the STE may induce a change in market structure and not …