Two firms compete in the style of Cournot. Both firms have a constant marginal cost. No capacity constraints for either firm. The market demand is linear Q(p) = a - bp. Which of the below can be observed in a Nash equilibrium? O "Firm 1's market share: 40%; firm 2's market share: 60% firm 1's Lerner index: 0.6; firm 2's Lerner index: 0.4." O "Firm 1's market share: 40%; firm 2's market share: 60% firm 1's Lerner index: 0.2; firm 2's Lerner index: 0.3." O "Firm 1's market share: 30%; firm 2's market share: 70% firm 1's Lerner index: 0.5; firm 2's Lerner index: 0.5." O "Firm 1's market share: 40%; firm 2's market share: 60% firm 1's Lerner index: 0.5; firm 2's Lerner index: 0.5." Depending on the cost and demand functions any of the above can be observed in a Nash equilibrium.

Two firms compete in the style of Cournot. Both firms have a constant marginal cost. No capacity constraints for either firm. The market demand is linear Q(p) = a - bp. Which of the below can be observed in a Nash equilibrium? O "Firm 1's market share: 40%; firm 2's market share: 60% firm 1's Lerner index: 0.6; firm 2's Lerner index: 0.4." O "Firm 1's market share: 40%; firm 2's market share: 60% firm 1's Lerner index: 0.2; firm 2's Lerner index: 0.3." O "Firm 1's market share: 30%; firm 2's market share: 70% firm 1's Lerner index: 0.5; firm 2's Lerner index: 0.5." O "Firm 1's market share: 40%; firm 2's market share: 60% firm 1's Lerner index: 0.5; firm 2's Lerner index: 0.5." Depending on the cost and demand functions any of the above can be observed in a Nash equilibrium.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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