Suppose the Demand Function in the Industry Is P =

question 84

Multiple Choice

Suppose the demand function in the industry is p = 100 - y and each firm has a constant marginal cost of $40 and no fixed costs. If the Cournot model of oligopoly accurately reflects firm behaviour in this industry, then the aggregate equilibrium output of n + 1 firms can be expressed as:

• A)160(n + 1)/(n + 2).
• B)20(n + 1).
• C)60(n + 1)/(n + 2).
• D)160n/(n + 1).

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Definitions:

Majority Vote

A decision-making rule in which the option that receives more than half of the votes amongst all options is chosen.

Inside Directors

Members of a company's board of directors who are also part of the company's management team, often holding executive positions.

Outside Directors

Members of a company's board of directors who are not part of the company's management and are typically brought in to provide independent oversight.

Preferred Stock

Stock that conveys preferences to its holders with respect to assets and dividends.