The following question relates to an oligopoly market where the industry demand curve is P = 100 - Q. Derive the reaction curve for a Cournot duopolist where the industry demand curve is as stated above and the MC of production is zero.
What will be an ideal response?
P = (100 - Q2) - Q1 MR = 100 - Q2 - 2Q1 MC = MR 0 = 100 - Q2 - 2Q1 2Q1 = 100 - Q2 Q1 = 50 - .5Q2 = firm 1's reaction curve
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A) $10. B) $25. C) $90. D) $115.
The analysis of Chapter 15 argues that the painfully slow recovery following the Great Recession, in which the accumulation of mistakes during the housing bubble are not being fully corrected, is explained by
A) the Fed's continued attempt to keep interest rates low and "help" the housing sector recover. B) the negative consequences of deficit policies that attempt to "stimulate" the economy. C) both of the above reasons. D) neither of the above reasons.
Inflation tends to ________ during the expansion phase of the business cycle and ________ during the recession phase of the business cycle
A) decrease; decrease further B) increase; increase further C) increase; decrease D) decrease; increase
When income rises, total expenditures remain constant.
Answer the following statement true (T) or false (F)