Suppose That Two Firms in a Duopoly Set Output According

Multiple Choice

Suppose that two firms in a duopoly set output according to the Cournot model. If demand is linear and the marginal cost of production for each firm is zero:

A) Total industry output will be exactly one-half of the output in perfect competition.
B) The two firms will engage in marginal cost pricing, just as in perfect competition.
C) Total industry output will be less than the total output in perfect competition, but Greater than one-half the output in perfect competition.
D) Total industry output is less than the output in monopoly.
E) The duopoly price is greater than the monopoly price.