The Demand Function in a Duopoly Is: P = 100

question 11

Multiple Choice

The demand function in a duopoly is: P = 100 - 2(Q1 + Q2) ,where P = price,Q1 = output of the firm,and Q2 = output of the second firm.If the first firm decides to sell 10 units while the second firm sells 20 units,which of the following will be true?

• A)The second firm will earn twice as much revenue as the first firm.
• B)The second firm will sell at a lower price than the first firm.
• C)An increase in one firm's output will not affect the other firm's revenue.
• D)The first firm will earn a higher profit than the second firm.
• E)The market price will be determined by the second firm's output which is larger than the first firm's output.

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Definitions:

Stockholders' Equity

The amount of capital given to a company by its shareholders plus its retained earnings.

Intangible Assets

Non-physical assets such as patents, trademarks, and copyrights that have value to a business.

Classified Balance Sheet

A balance sheet that organizes assets and liabilities into subcategories like current, long-term, property, plant, and equipment, to provide more detailed information.

Current Ratio

It's a financial ratio that calculates whether a corporation can cover its obligations that need to be paid within one year, by dividing the current assets by the current liabilities.