Consider a Cournot duopoly with the following inverse demand function: P = 100 ? 2Q1 ? 2Q2. The firms' marginal costs are identical and are given by MCi = 2. Based on this information, consumer surplus in this market is:
A. $2,134.22.
B. $16.33.
C. $32.67.
D. $1,067.11.
Answer: D
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The table above gives the production possibilities frontier for two countries, Anaconda and Bear. The table shows that
A) Anaconda has a comparative advantage in the production of corn. B) Bear has an absolute advantage in the production of both goods. C) Anaconda achieves production efficiency only at its production point A. D) Bear achieves production efficiency only at its production point A. E) Both answers A and B are correct.
The theories of economics, with surprisingly few exceptions, are extensions of which of the following assumptions about people?
A) People will do whatever earns them the most money. B) People will do whatever helps them to be "one up" on others. C) People will do whatever makes them popular. D) People will do whatever most effectively promotes the common good. E) People will do whatever yields them the largest net benefit.
Using Scenario 2 suppose Jennifer has eliminated three of the answers but is unsure of which of the remaining two answers are correct. Determine whether it is rational for Jennifer to guess
What will be an ideal response?
According to the theory of hysteresis, a prolonged recession will:
a. decrease the natural rate of unemployment. b. increase cyclical unemployment. c. decrease the sacrifice ratio. d. increase the natural rate of unemployment.