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 quantity in the different equilibrium oligopoly models will follow which of the following orderings?
A. QBertrand < QCollusion < QCournot < QStackelberg
B. QBertrand < QStackelberg < QCournot < QCollusion
C. QCollusion < QCournot < QStackelberg < QBertrand
D. QCollusion < QStackelberg < QCournot < QBertrand
Answer: C
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A) inelastic but more elastic than the demand for automobiles. B) elastic and more elastic than the demand for automobiles. C) inelastic and less elastic than the demand for automobiles. D) elastic but less elastic than the demand for automobiles.
Expansionary fiscal policy
What will be an ideal response?
Unions do not need to worry about the effects of greater employment numbers on the wage rate.
Answer the following statement true (T) or false (F)