Consider a Cournot Duopoly with the Following Inverse Demand Function

question 53

Multiple Choice

Consider a Cournot duopoly with the following inverse demand function: P = 50 - 0.2Q₁ - 0.2Q₂.The firms' marginal cost are identical and given by MC_i(Q_i) = 2.Based on this information firm 1 and 2's reaction functions are

• A)r₁(Q₂) = 4.8 - 0.5Q₁ and r₂(Q₁) = 4.8 - 0.5Q₂.
• B)r₁(Q₂) = 4.8 - 0.5Q₂ and r₁(Q₂) = 4.8 - 0.5Q₁.
• C)Q₁ = 25 - 0.75Q₂ and Q₂ = 25 - 0.75Q₁.
• D)Q₁ = 240 - 0.5Q₂ and Q₂ = 240 - 0.5Q₁.

---

Definitions:

Judged

Evaluated or decided by a legal authority, such as a judge or a court.

Actions

Measures or steps taken in order to achieve a particular end.

Appearance

In legal contexts, the formal act of showing up in court, either personally or through an attorney, indicating participation in the process.

Attitude

Attitude pertains to a person's settled way of thinking or feeling about something, often reflected in their behavior.