Consider a Market Consisting of Two Firms Where the Inverse

question 22

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

• A) P^Bertrand < P^Stackelberg < P^Cournot < P^Collusion
• B) P^Stackelberg < P^Collusion < P^Cournot < P^Bertrand
• C) P^Collusion < P^Cournot < P^Stackelberg < P^Bertrand
• D) P^Bertrand < P^Cournot < P^Stackelberg < P^Collusion

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