Suppose Cournot duopolist firms operate with each having a cost of 30qi (i = 1,2 ) so that each firm's marginal cost is 30. The inverse market demand curve is P = 120 - Q where Q = q1 + q2. At the Nash-Cournot equilibrium, the total quantity, Q, is
A) 30.
B) 45.
C) 60.
D) 90.
C
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A look at macroeconomic data across countries reveals that when economies experience recessions, unemployment rates rise, but wages fall very little, if at all. Which of the following is most likely to support this observation?
a. Wages are determined by the interaction of the forces of labor demand and supply. b. The demand for labor is derived demand and hence does not fall during recessions. c. The labor market usually exhibits perfect competition. d. The labor supply curve becomes perfectly inelastic during recessions. e. Long term labor contracts make the wage rates sticky downwards.
Within the financial services industry, which of the following is an example of a financial institution?
A. Pension funds B. Thrifts C. Insurance companies D. All of these
The purpose of the Labor Side Agreement under NAFTA is to:
a. increase standards in Mexico only. b. increase standards throughout NAFTA. c. enforce existing standards throughout NAFTA. d. renegotiate standards.
Assume that the home construction industry is perfectly competitive and is in long-run competitive equilibrium. It follows that:
A. firms in the industry enjoy economic profits. B. marginal cost exceeds long-run average total cost. C. marginal cost equals long-run average total cost. D. there will be incentive for new firms to enter the industry.