Suppose the Demand in a Certain Duopoly Market with Homogenous

question 13

Multiple Choice

Suppose the demand in a certain duopoly market with homogenous goods is Q^d = 8,000 - 100P.The two firms in the market are firm V and firm W,and the marginal cost of producing the goods in question is equal to $25.Which of the following describes the Nash equilibrium in this market?

• A) P_V = P_W = $25
• B) One of the firms charges a price higher than $25, and one of the firms charges a price lower than $25.
• C) P_V = P_W > $25
• D) P_V = P_W < $25

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