Firms 1 and 2 Compete in a Cournot Duopoly

question 3

Multiple Choice

Firms 1 and 2 compete in a Cournot duopoly.If firm 1 adopts a strategy that raises firm 2's marginal cost:

• A) firm 2 will increase its output.
• B) firm 1 will lose market share.
• C) firm 1 will enjoy higher profits.
• D) All of the statements associated with this question are correct.

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Definitions:

Path-Goal Theory

A leadership theory that assesses how leaders can motivate their followers by defining and clarifying paths to achieving goals, along with removing obstacles along the way.

Authoritarian

A leadership approach where a single person makes all the decisions without much contribution from team members, typically enforcing strict guidelines and procedures.

Directive Leadership

A leadership approach that involves providing clear instructions, setting performance standards, and ensuring that followers follow procedures closely.

Directive Leadership

A leadership style where the leader tells team members what to do, provides specific guidance, and expects compliance.