Consider a Market Consisting of Two Firms Where the Inverse

question 118

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 consumer surplus in the different equilibrium oligopoly models will follow which of the following orderings?

• A) CS^Collusion > CS^Stackelberg > CS^Cournot > CS^Bertrand
• B) CS^Bertrand > CS^Stackelberg > CS^Cournot > CS^Collusion
• C) CS^Bertrand > CS^Cournot > CS^Stackelberg > CS^Collusion
• D) CS^Stackelberg > CS^Bertrand > CS^Cournot > CS^Collusion

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Definitions:

Unsold Merchandise

Items that have not been sold during a specific period, often leading to overstock and potential losses for businesses.

Risk

The uncertainty regarding the loss or gain in the future, affecting decisions in finance and investments.

Uncertainty

A situation where the outcomes of actions or events are unknown, often leading to risk in decision-making.

Body Mass Index (BMI)

A numerical computation that evaluates an individual's body weight in relation to their height, used to categorize underweight, normal weight, overweight, and obesity.