Firms 1 and 2 Compete in a Cournot Duopoly

question 50

Multiple Choice

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

• A) firm 1 will increase its output.
• B) firm 2 will lose market share.
• C) firm 1 will enjoy higher profits.
• D) None of the statements is correct.

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Definitions:

Emotional Dissonance

The conflict or incongruence between experienced emotions and emotions expressed due to situational or professional demands.

Broad Term

A term or phrase that is used to describe a wide range of concepts or categories rather than being specific or detailed.

Affects

The range of feelings in form of emotions and moods that people experience.

Emotional Contagion

A phenomenon in which emotions which are experienced by few people of a work group are spread to the others.