Suppose in a Cournot Duopoly That Two Firms, Firm 1 $P = 50 -$

question 12

Multiple Choice

Suppose in a Cournot duopoly that two firms, Firm 1 and Firm 2, face market demand $P = 50 -$ $Q$ and both have marginal cost, $M C = \$ 20$ . The equilibrium industry profits in this market will be:

• A) 150
• B) 200
• C) 250
• D) 300

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Definitions:

25-year Annuity

A financial product that provides a series of payments made at equal intervals over 25 years.

Compounded Semi-annually

A method of computing interest where the interest is calculated and added to the principal twice a year.

Periodic Interest Rate

The interest rate applied to a loan or investment over a specific period of time, less frequently than annually.

Compounded Monthly

The method of calculating interest where the accrued interest is added to the principal sum each month, leading to interest on interest the following month.