The Inverse Demand in a Cournot Duopoly Is P =

Multiple Choice

The inverse demand in a Cournot duopoly is P = a - b (Q₁ + Q₂) , and costs are C₁(Q₁) = c₁Q₁ and C₂(Q₂) = c₂Q₂.The Government has imposed a per unit tax of $t on each unit sold by each firm.The tax revenue is:

A) t times the total output of the two firms should there be no sales tax.
B) less than t times the total output of the two firms should there be no sales tax.
C) greater than t times the total output of the two firms should there be no sales tax.
D) none of the statements associated with this question are correct.