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.

---

Definitions:

Implied Warranty

A guarantee that is not written or spoken but is understood and legally binding, ensuring goods or services meet certain standards of quality and reliability.

Implied Warranty

A legal presumption that a product will fulfill the basic functions for which it was sold, without being explicitly stated by the seller.

Merchantability

Concerns the basic standard of quality and functionality that goods sold must meet, implying they are fit for the general purpose for which they are sold.

Fitness

A state of health and well-being, often focused on the ability to perform physical activities or meet specific physical criteria.