Firms 1 and 2 Compete in a Cournot Duopoly

question 24

Multiple Choice

Firms 1 and 2 compete in a Cournot duopoly.If firm 1 adopts a strategy that raises firm 2's marginal cost

• A)firm 2 will increase its output.
• B)firm 1 will lose market share.
• C)firm 1 will enjoy higher profits.
• D)all of the statements associated with this question are correct.

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Definitions:

Defense Mechanism

Psychological strategies brought into play by individuals, groups, and even nations to cope with reality and to maintain self-image.

Repression

A psychological defense mechanism where unwanted thoughts and memories are unconsciously blocked from entering awareness.

Conscious Suppression

The deliberate effort to hold back or inhibit thoughts, feelings, or impulses.

Partly Conscious

A state of awareness in which an individual is partially aware of their surroundings and experiences.