Both Firms in a Cournot Duopoly Would Enjoy Lower Profits

question 91

Multiple Choice

Both firms in a Cournot duopoly would enjoy lower profits if:

• A) the firms simultaneously reduced output below the Nash equilibrium level.
• B) each firm simultaneously increased output above the Nash equilibrium level.
• C) one firm reduced output below the Cournot Nash equilibrium level, while the other firm continued to produce its Cournot Nash equilibrium output.
• D) None of the preceding answers is correct.

---

Definitions:

Differentiation

The process of distinguishing a product, service, or brand from its competitors by emphasizing unique features or attributes.

Hierarchical Referral

A method of decision-making or information dissemination that follows a structured path of authority within an organization.

Subsystems Integration

The process of making different subcomponents of a system work together effectively and efficiently for overall system performance.

Liaison Roles

Positions or functions within an organization tasked with facilitating communication and coordination between different departments or groups.