Firms 1 and 2 Compete in a Cournot Duopoly

question 59

Multiple Choice

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

• A)Firm 1 will increase its output.
• B)Firm 2 will lose market share.
• C)Firm 2 will enjoy lower profits.
• D)None of the statements associated with this question are correct.

---

Definitions:

Social Structures

Social structures are the complex framework of societal institutions (such as the economy, politics, and religion) and the social practices (rules, roles, and relationships) that make up a society.

Structural Functionalism

Describes a perspective in sociology where society is viewed as a complex structure, with its various segments working in unison to uphold solidarity and ensure overall stability.

Stability of Society

The condition in which a society maintains its structure and functions without significant disruption or change over time.

Sociological Imagination

The capacity to shift from one perspective to another to understand the relationship between individual experiences and larger social influences.