Consider a Market Consisting of Two Firms Where the Inverse

question 21

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

• A)  ^Bertand >  ^Collusion >  ^Stackelberg >  ^Cournot
• B)  ^Collusion >  ^Cournot >  ^Stackelberg >  ^Bertand
• C)  ^Collusion >  ^Stackelberg >  ^Cournot >  ^Bertand
• D) None of the preceding answers is correct.

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