Now assume that both firms are in the market and they choose quantities to supply. Assume also that, in equilibrium, firm 1 supplies 1/4 of the market, while firm 2 supplies the remaining 3/4. Then, in equilibrium, Question 2 options: Firm 1 charges a larger (percentage) mark-up over its costs than firm 2. Firm 1's mark-up is smaller than the mark-up it would charge if it was a monopoly. Firm 1 charges a smaller (percentage) mark-up over its costs than firm 2. However, Firm 1's mark-up is larger than the mark-up it would charge if it was a monopoly. Firm 1 charges a larger (percentage) mark-up over its costs than firm 2. Firm 1's mark-up is larger than the mark-up it would charge if it was a monopoly. Firm 1 and Firm 2 charge the same mark-up (in percent). This mark-up is smaller than the mark-up they would charge as monopolists. Firm 1 and Firm 2 charge the same mark-up (in percent). This mark-up is larger than the mark-up they would charge as monopolists. Firm 1 charges a smaller (percentage) mark-up over its costs than firm 2. Firm 1's mark-up is smaller than the mark-up it would charge if it was a monopoly
Now assume that both firms are in the market and they choose quantities to supply. Assume also that, in equilibrium, firm 1 supplies 1/4 of the market, while firm 2 supplies the remaining 3/4. Then, in equilibrium,
Question 2 options:
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Firm 1 charges a larger (percentage) mark-up over its costs than firm 2. Firm 1's mark-up is smaller than the mark-up it would charge if it was a |
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Firm 1 charges a smaller (percentage) mark-up over its costs than firm 2. However, Firm 1's mark-up is larger than the mark-up it would charge if it was a monopoly. |
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Firm 1 charges a larger (percentage) mark-up over its costs than firm 2. Firm 1's mark-up is larger than the mark-up it would charge if it was a monopoly. |
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Firm 1 and Firm 2 charge the same mark-up (in percent). This mark-up is smaller than the mark-up they would charge as monopolists. |
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Firm 1 and Firm 2 charge the same mark-up (in percent). This mark-up is larger than the mark-up they would charge as monopolists. |
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Firm 1 charges a smaller (percentage) mark-up over its costs than firm 2. Firm 1's mark-up is smaller than the mark-up it would charge if it was a monopoly. |
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why is it not firm 1 will charge a larger percentage markup over its cost than firm 2? according to this part of the explanation "As firm 1 has a smaller market share, it will face a less
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