Consider a Cournot Duopoly with the Following Inverse Demand Function

question 87

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 consumer surplus in this market is

• A)$16.33.
• B)$32.67.
• C)$1,067.11.
• D)$2,134.22.

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Definitions:

Percentage Change

Percentage Change is a mathematical calculation that shows how much a quantity has increased or decreased as a percentage of its previous amount.

Incomes

Periodic earnings obtained from professional activities or financial investments.

Services

Economic activities that produce intangible goods, such as entertainment, healthcare, and education.

MPC

A measure of the rate at which consumers are likely to spend additional income, rather than save it.