Suppose That Microsoft and Google Compete in the Market for PC

Multiple Choice

Suppose that Microsoft and Google compete in the market for PC Internet browsers.Initially these firms compete as Cournot duopolies with symmetric reaction functions.If Microsoft enters into exclusive contracts with PC suppliers that preclude suppliers from loading Google's Internet browser on PCs loaded with the Windows operating system,then Google's marginal cost of distributing its browser will increase to $5 per unit. The new equilibrium would entail Microsoft supplying __________ browsers and Google supplying ____________ browsers to the market.The end result is ________ profits for Google.

A) more; fewer; lower
B) fewer; more; higher
C) more; more; lower
D) fewer; fewer; higher