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 consumer surplus in the different equilibrium oligopoly models will follow which of the following orderings?
A. CSBertrand > CSStackelberg > CSCournot > CSCollusion
B. CSBertrand > CSCournot > CSStackelberg > CSCollusion
C. CSStackelberg > CSBertrand > CSCournot > CSCollusion
D. CSCollusion > CSStackelberg > CSCournot > CSBertrand
Answer: A
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