Consider a Cournot Duopoly with the Following Inverse Demand Function

question 120

Multiple Choice

Consider a Cournot duopoly with the following inverse demand function: P = 100 − 2Q₁ − 2Q₂.The firms' marginal costs are identical and are given by MC_i(Q_i) = 2Q_i.Based on this information,firm 1 and 2's marginal revenue functions are:

• A) MR₁(Q₁,Q₂) = 100 − 2Q₁ − Q₂ and MR₂(Q₁,Q₂) = 100 − Q₁ − 2Q₂.
• B) MR₁(Q₁,Q₂) = 100 − 4Q₁ − 2Q₂ and MR₂(Q₁,Q₂) = 100 − 2Q₁ − 4Q₂.
• C) MR₁(Q₁,Q₂) = 100 − 2Q₁ − 4Q₂ and MR₂(Q₁,Q₂) = 100 − 4Q₁ − 2Q₂.
• D) MR₁(Q₁,Q₂) = 24.5 − 0.5Q₂ and MR₂(Q₁,Q₂) = 24.5 − 0.5Q₁.

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