Cournot Problem

question 15

Multiple Choice

Cournot Problem. Consider a Cournot oligopoly with two identical firms. These firms each have constant marginal costs of $10. The market for these firms’ product has demand Q = 100 - P.


-Refer to Cournot Problem.In the Nash Equilibrium,the deadweight loss will be

• A) $300
• B) $450
• C) $600
• D) $900

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Definitions:

Ounces

A unit of weight commonly used in the United States, where one pound is equal to 16 ounces.

Soft Drink

A soft drink is a non-alcoholic beverage, usually carbonated, flavored with various sweeteners and other ingredients.

Gallons

A unit of volume measurement used primarily in the United States, equivalent to 3.785 liters.

Liters

A metric unit of volume equal to one cubic decimeter, used to measure liquids and gases.