Suppose That Firms a and B Are Cournot Duopolists in the Salt

question 53

Multiple Choice

Suppose that firms A and B are Cournot duopolists in the salt industry.The market demand curve can be specified as The marginal cost to each firm is $40.Suppose that firm A is producing 100 units.What is firm B's profit-maximizing quantity?

• A) 100.
• B) 60.
• C) 30.
• D) 20.

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Definitions:

Tax Paid

The amount of money paid to the government as a result of taxable activities, such as income earned or goods sold.

Ending Fixed Assets

The value of a company's physical assets, such as property, buildings, and machinery, at the end of an accounting period.

Cash Flow From Assets

The total of cash flow to bondholders and cash flow to shareholders, consisting of operating cash flow, capital spending, and additions to net working capital.

EBIT

Earnings Before Interest and Taxes, a measure of a company's profitability based purely on operational and business activities without considering interest and tax expenses.