The Inverse Demand Function for Fuzzy Dice Is P =

question 45

Multiple Choice

The inverse demand function for fuzzy dice is p = 20 - q. There are constant returns to scale in this industry with unit costs of $8. Which of the following sets of statements is completely true?

• A) Monopoly output is 6. Cournot duopoly total output is 8. A Stackelberg leader's output is 8.
• B) Monopoly output is 8. Cournot duopoly total output is 8. A Stackelberg leader's output is 8.
• C) Monopoly output is 6. Cournot duopoly total output is 6. A Stackelberg follower's output is 3.
• D) Monopoly output is 6. Cournot duopoly total output is 8. A Stackelberg follower's output is 3.
• E) Monopoly output is 6. Cournot duopoly total output is 8. A Stackelberg follower's output is 4.

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Definitions:

Equity Method

An accounting technique used to record investments in other companies, recognizing income proportional to ownership.

Consolidation

The process of combining the financial statements of separate but related entities into a single set of financial statements for the group.

Consolidated Net Income

The total net income of a parent company and its subsidiaries, after adjusting for intercompany transactions, reported as a single figure.

Equity Method

An accounting technique used when a company has significant influence over another company it invests in, typically reflected by owning 20% to 50% of the voting stock, where the investment is initially recorded at cost and adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s net assets.