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. ?Collusion > ?Stackelberg > ?Cournot > ?Bertrand
B. ?Bertrand > ?Collusion > ?Stackelberg > ?Cournot
C. ?Collusion > ?Cournot > ?Stackelberg > ?Bertrand
D. None of the answers is correct.
Answer: C
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