If a Cournot Duopolist Announced That It Will Double Its

question 104

Multiple Choice

If a Cournot duopolist announced that it will double its output,the other firm does not view the announcement as credible because

• A) the announcing firm's profits will fall if it carries out the threat.
• B) the other firm's profits will fall if the announcing firm carries out the threat.
• C) the other firm's profits will rise if the announcing firm carries out the threat.
• D) the other firm will double output also.