Consider a Market Consisting of Two Firms Where the Inverse

Multiple Choice

Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2Q₁ - 2Q₂. Each firm has a marginal cost of $50. Based on this information, we can conclude that aggregate profits in the different equilibrium oligopoly models will follow which of the following orderings?

A) π^Bertand > π^Collusion > π^Stackelberg > π^Cournot
B) π^Collusion > π^Cournot > π^Stackelberg > π^Bertand
C) π^Collusion > π^Stackelberg > π^Cournot > π^Bertand
D) None of the answers is correct.