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(Qi) = 2Qi. Based on this information, firm 1 and 2's marginal revenue functions are:
A. MR1(Q1,Q2) = 24.5 ? 0.5Q2 and MR2(Q1,Q2) = 24.5 ? 0.5Q1.
B. MR1(Q1,Q2) = 100 ? 4Q1 ? 2Q2 and MR2(Q1,Q2) = 100 ? 2Q1 ? 4Q2.
C. MR1(Q1,Q2) = 100 ? 2Q1 ? 4Q2 and MR2(Q1,Q2) = 100 ? 4Q1 ? 2Q2.
D. MR1(Q1,Q2) = 100 ? 2Q1 ? Q2 and MR2(Q1,Q2) = 100 ? Q1 ? 2Q2.
Answer: B
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