Consider a Cournot Duopoly with the Following Inverse Demand Function

question 81

Multiple Choice

Consider a Cournot duopoly with the following inverse demand function: P = 100 - 2Q₁ - 2Q₂.The firms' marginal cost are identical and given by MC_i(Q_i) = 2Q_i.Based on this information firm 1 and 2's marginal revenue functions are

• A)MR₁(Q₁,Q₂) = 100 - 2Q₁ - Q₂ and MR₂(Q₁,Q₂) = 100 - Q₁ - 2Q₂.
• B)MR₁(Q₁,Q₂) = 100 - 4Q₁ - 2Q₂ and MR₂(Q₁,Q₂) = 100 - 2Q₁ - 4Q₂.
• C)MR₁(Q₁,Q₂) = 100 - 2Q₁ - 4Q₂ and MR₂(Q₁,Q₂) = 100 - 4Q₁ - 2Q₂.
• D)MR₁(Q₁,Q₂) = 24.5 - 0.5Q₂ and MR₂(Q₁,Q₂) = 24.5 - 0.5Q₁.

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