Suppose Cournot Duopolist Firms Operate with Each Having a Cost

question 68

Multiple Choice

Suppose Cournot duopolist firms operate with each having a cost of 30q_i (i = 1,2) so that each firm's marginal cost is 30.The inverse market demand curve is P = 120 - Q where Q = q₁ + q₂.Suppose there were no barriers to entry and firms continued to enter so long as there were positive economic profits.At the Nash-Cournot equilibrium,the price,P,is

• A) 30.
• B) 45.
• C) 60.
• D) 90.

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