QUESTION 11 Two firms are competing in a Cournot duopoly. Both firms have the same constant marginal cost. The market demand is linear. Suppose the constant marginal cost of firm 2 is increasing. Which of the following statements are correct? [There may be more than one correct statement.] The quantity of firm 1 goes down and the quantity of firm 2 goes up. The market price stays the same. The quantity of firm 1 and the quantity of firm 2 both go up. The market price goes down. The quantity of firm 1 goes up and the quantity of firm 2 goes down. The quantity of firm 1 and the quantity of firm 2 go down. The market price goes up.

QUESTION 11 Two firms are competing in a Cournot duopoly. Both firms have the same constant marginal cost. The market demand is linear. Suppose the constant marginal cost of firm 2 is increasing. Which of the following statements are correct? [There may be more than one correct statement.] The quantity of firm 1 goes down and the quantity of firm 2 goes up. The market price stays the same. The quantity of firm 1 and the quantity of firm 2 both go up. The market price goes down. The quantity of firm 1 goes up and the quantity of firm 2 goes down. The quantity of firm 1 and the quantity of firm 2 go down. The market price goes up.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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