In a 2-Firm Oligopoly, If You Can Choose to Either

question 17

True/False

In a 2-firm oligopoly, if you can choose to either be a simultaneous move Cournot competitor or a Stackelberg leader, you will always choose to be a Stackelberg leader.

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Definitions:

Debt-to-Total-Assets Ratio

The debt-to-total-assets ratio is a financial metric that measures a company's leverage by comparing total debts to total assets.

Capital Structure

The manner in which a firm’s assets are financed; that is, the right side of the balance sheet. Capital structure is normally expressed as the percentage of each type of capital used by the firm such as debt, preferred stock, and common equity.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholders' equity.

Debt-to-Total-Assets Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by its total assets, showing what portion of the assets is financed by debt.