Consider a Market Consisting of Two Firms Where the Inverse

question 50

Multiple Choice

Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2Q₁ - 2Q₂. Each firm has a marginal cost of $50. Based on this information, we can conclude that aggregate profits in the different equilibrium oligopoly models will follow which of the following orderings?

• A) π^Bertand > π^Collusion > π^Stackelberg > π^Cournot
• B) π^Collusion > π^Cournot > π^Stackelberg > π^Bertand
• C) π^Collusion > π^Stackelberg > π^Cournot > π^Bertand
• D) None of the answers is correct.

---

Definitions:

Store Visit

The act of going to a physical retail location to examine or purchase products or services.

Category Management

An approach to managing the assortment of merchandise in which a manager is assigned the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other, with the objective of maximizing sales and profits in the category.

Merchandise Assortment

The range of products a retailer offers for sale, including the variety of product lines, categories, and individual items, to meet customer demands.

Product Management

The process of developing, bringing to market, and managing a product throughout its lifecycle, from concept to discontinuation.