Suppose That the Duopolists Carl and Simon in Problem 1

question 20

Multiple Choice

Suppose that the duopolists Carl and Simon in Problem 1 face a demand function for pumpkins of Q = 16,800 - 800P, 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 $1 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 R_C(Q_s) =

• A) 16,800 - 800Q_s.
• B) 8,000 -.
• C) 16,800 - 1,600Q_s.
• D) 4,000 -.
• E) 12,000 - Q_s.

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