A New Firm Enters a Market Which Is Initially Serviced

question 129

Multiple Choice

A new firm enters a market which is initially serviced by a Cournot duopoly charging a price of $20. What will the new market price be should the three firms coexist after the entry?

• A) $20
• B) Below $20
• C) Above $20
• D) None of the answers is correct.

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Definitions:

Homeless Shelter

A place providing temporary accommodation and support services to people who are without a home.

Cognitive Heuristics

Mental shortcuts or rules of thumb that simplify decision-making processes, often leading to quick, yet sometimes inaccurate, judgments.

False Positives

Instances where a test incorrectly indicates the presence of a condition or attribute that is actually not present.

Biased Thinking

The inclination or predisposition towards a particular perspective, idea, or result, often leading to unfair judgment.