B) Consider a Cournot duopoly with the following inverse demand function: P = 450 – 5Q1 - 5Q2. The firms' marginal costs are identical and are given by MCj(Q¡) = 5Qi. Based on this information, firm 1 and 2's marginal revenue functions are Multiple Choice MR1(Q1,Q2) = 450 – 5Q1 – 10Q2 and MR2(Q1,Q2) = 450 – 10Q1 – 5Q2. MR1(Q1,Q2) = 225 – 10Q1 and MR2(Q1,Q2) = 225 - 10Q2. MR1(Q1,Q2) = 450 – 10Q1 – 10Q2 and MR2(Q1,Q2) = 450 – 10Q1 – 10Q2. - %3D MR1(Q1,Q2) = 450 – 10Q1 – 5Q2 and MR2(Q1,Q2) = 450 – 5Q1 – 10Q2. %3D

B) Consider a Cournot duopoly with the following inverse demand function: P = 450 – 5Q1 - 5Q2. The firms' marginal costs are identical and are given by MCj(Q¡) = 5Qi. Based on this information, firm 1 and 2's marginal revenue functions are Multiple Choice MR1(Q1,Q2) = 450 – 5Q1 – 10Q2 and MR2(Q1,Q2) = 450 – 10Q1 – 5Q2. MR1(Q1,Q2) = 225 – 10Q1 and MR2(Q1,Q2) = 225 - 10Q2. MR1(Q1,Q2) = 450 – 10Q1 – 10Q2 and MR2(Q1,Q2) = 450 – 10Q1 – 10Q2. - %3D MR1(Q1,Q2) = 450 – 10Q1 – 5Q2 and MR2(Q1,Q2) = 450 – 5Q1 – 10Q2. %3D

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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