Suppose That the Duopolists Carl and Simon Face a Demand

question 6

Multiple Choice

Suppose that the duopolists Carl and Simon face a demand function for pumpkins of Q = 1,800 - 400P, 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 $.50 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)1,800 - 400Q_s.
• B)1,800 - 800Q_s.
• C)800 - Q_s/2.
• D)400 - Q_s/2.
• E)1,200 - Q_s.

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Definitions:

Rods and Cones

Specialized types of photoreceptor cells in the retina that are responsible for vision in low light (rods) and color vision and detailed vision in brighter light (cones).

Retina

The light-sensitive layer of tissue at the back of the inner eye, containing photoreceptor cells that convert light into neural signals.

Brain

Ganglionic mass at the anterior end of the nerve cord; in vertebrates, the brain is located in the cranial cavity of the skull.

Lens

A transparent, flexible structure in the eye that focuses light onto the retina to produce clear images.