Both Firms in a Cournot Duopoly Would Enjoy Lower Profits

question 9

Multiple Choice

Both firms in a Cournot duopoly would enjoy lower profits if:

• A) the firms simultaneously reduced output below the Nash equilibrium level.
• B) each firm simultaneously increased output above the Nash equilibrium level.
• C) one firm reduced output below the Cournot Nash equilibrium level, while the other firm continued to produce its Cournot Nash equilibrium output.
• D) None of the answers is correct.

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