For a Market with a Linear Demand Curve and Constant

question 31

Multiple Choice

For a market with a linear demand curve and constant marginal cost of production, why are the reaction functions for the Cournot duopoly sellers also straight lines?

• A) The reaction functions do not have to be straight lines, and they are only drawn this way in the book to keep the figures simple.
• B) Cournot thought the lines would be straight, but this was proven wrong by other economists.
• C) Marginal revenue is always linear when marginal costs are constant.
• D) We know that the marginal revenue curves for linear demand curves are also straight lines.

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