Firm 1 and Firm 2 Compete as a Cournot Oligopoly

question 115

Multiple Choice

Firm 1 and firm 2 compete as a Cournot oligopoly.There is an increase in marginal cost for firm 1.Which of the following is NOT true?

• A) Firm 1 will produce less.
• B) Firm 2 will produce more.
• C) Both firm 1's and firm 2's reaction functions are shifted.
• D) Profits of firm 1 will decrease.

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