The Duopolists Carl and Simon Face a Demand Function for Pumpkins

question 18

Multiple Choice

The duopolists Carl and Simon face a demand function for pumpkins of Q = 8,200 - 400P, where Q is the total number of pumpkins that reach the market and P is the price of pumpkins. Suppose further that each farmer has a constant marginal cost of $.50 for each pumpkin produced. If Carl believes that Simon is going to produce Q_s pumpkins this year, then the reaction function tells us how many pumpkins Carl should produce in order to maximize his profits. Carl's reaction function is

• A) R_C(Q_s) = 4,000 -.
• B) R_C(Q_s) = 8,200 - 400Q_s.
• C) R_C(Q_s) = 8,200 - 800Q_s.
• D) R_C(Q_s) = 2,000 -.
• E) R_C(Q_s) = 6,000 - Q_s.

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Definitions:

Two-Way Communication

A form of communication in which messages are sent and received between parties, allowing for feedback and interaction.

Time-Consuming

Activities or processes that require a significant amount of time to complete.

Communication Process

The series of steps and stages through which information is transmitted and received between communicators.

Sociopsychological Factors

Elements that influence an individual's behavior and attitudes, combining social and psychological aspects, such as group dynamics and personal motivations.