5. In a Cournot duopoly model where both firms have the same marginal cost and produce identical products, which of the following features is not true: a) The equilibrium price is somewhere between the competitive and monopoly level b) Each firm adjusts its price depending on the price charged by the other firm c) Each firm calculates its demand as the overall demand less the quantity it assumes the other will sell. d) The equilibrium price is the same for both firms e) The equilibrium price is higher than the one that would be attained under Bertrand competition

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter12: Price And Output Determination: Oligopoly
Section: Chapter Questions
Problem 1E
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5. In a Cournot duopoly model where both firms have the same marginal cost
and produce
identical products, which of the following features is not true:
a) The equilibrium price is somewhere between the competitive and
monopoly level
b) Each firm adjusts its price depending on the price charged by the other
firm
c) Each firm calculates its demand as the overall demand less the quantity it
assumes the
other will sell.
d) The equilibrium price is the same for both firms
e) The equilibrium price is higher than the one that would be attained under
Bertrand
competition
Transcribed Image Text:5. In a Cournot duopoly model where both firms have the same marginal cost and produce identical products, which of the following features is not true: a) The equilibrium price is somewhere between the competitive and monopoly level b) Each firm adjusts its price depending on the price charged by the other firm c) Each firm calculates its demand as the overall demand less the quantity it assumes the other will sell. d) The equilibrium price is the same for both firms e) The equilibrium price is higher than the one that would be attained under Bertrand competition
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