An Industry Has Two Firms

question 4

Multiple Choice

An industry has two firms. The inverse demand function for this industry is p = 74 - 4q. Both firms produce at a constant unit cost of $26 per unit. What is the Cournot equilibrium price for this industry?

• A) $21
• B) $29
• C) $42
• D) $26
• E) None of the above.

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Definitions:

Mean

The average value of a set of numbers, calculated by dividing the sum of the numbers by the count of the numbers.

Normal Curve

A symmetrical bell-shaped curve representing the distribution of values, traits, or characteristics that are normally distributed.

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how much the values differ from the mean.

Mean

The arithmetic average of a set of numbers, calculated by summing them and dividing by the number of numbers.