As compared to the basic Nash-Cournot equilibrium for duopolists where the firms face the same market demand curve and have identical costs, in the situation where the firms produce products which are viewed by consumers as not being identical,
A) there will generally be different prices charged by the two firms.
B) there will generally be different quantities produced by the two firms.
C) one or both of the firms may practice spurious differentiation.
D) All of the above.
D
You might also like to view...
Explain the connection between property rights and economic growth
What will be an ideal response?
If M increases and V decreases: a. nominal GDP increases
b. nominal GDP decreases. c. nominal GDP stays the same. d. there is an indeterminate effect on nominal GDP.
The incidence of a payroll tax
a. depends upon whether it is levied on the employer or employee. b. is the same whether it is levied on the employer or the employee. c. is more heavily on the employee as demand for labor becomes more elastic. d. is more heavily on the employer as demand for labor becomes less elastic.
Explain how exchange rates affect the level of aggregate economic activity and the price level. Use appropriate AS/AD diagrams to illustrate your answer