Solved

Suppose Two Cournot Duopolist Firms Operate at Zero Marginal Cost

Question 58

Multiple Choice

Suppose two Cournot duopolist firms operate at zero marginal cost. The market demand is p = a - bQ. Firm 1's best-response function is

A) q1 = (a - bq2) /2b.
B) q1 = (a - 2bq2) /2b.
C) q1 = a/b.
D) q1 = a/2b.

Related Questions

Q23: In a Bertrand model with identical firms

Q54: A merger between a firm and one

Q55: If differentiation makes the market demand curve

Q56: If a firm's marginal costs _, then

Q59: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB8230/.jpg" alt=" -The above figure

Q60: Mergers often increase profit by<br>A)producing economies of

Q63: The market for electricians in a small

Q74: Two identical firms that share a market

Q86: Monopolistically competitive firms face downward-sloping residual demand

Q99: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB6808/.jpg" alt=" -The above figure