Consider a Market Consisting of Two Firms Where the Inverse $\pi$

question 5

Multiple Choice

Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2Q₁ - 2Q₂.Each firm has a marginal cost of $50.Based on this information we can conclude that aggregate profits in the different equilibrium oligopoly models will follow which of the following orderings.

• A)\(\pi\)^Bertand > \(\pi\)^Collusion > \(\pi\)^Stackelberg > \(\pi\)^Cournot.
• B)\(\pi\)^Collusion > \(\pi\)^Cournot > \(\pi\)^Stackelberg > \(\pi\)^Bertand.
• C)\(\pi\)^Collusion > \(\pi\)^Stackelberg > \(\pi\)^Cournot > \(\pi\)^Bertand.
• D)None of the statements associated with question are correct.

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