QUESTION 11 Two firms are competing in a Cournot duopoly. Both firms have the same constant marginal cost. The market demand is linear. Suppose the constant marginal cost of firm 2 is increasing. Which of the following statements are correct? [There may be more than one correct statement.] The quantity of firm 1 goes down and the quantity of firm 2 goes up. The market price stays the same. The quantity of firm 1 and the quantity of firm 2 both go up. The market price goes down. The quantity of firm 1 goes up and the quantity of firm 2 goes down. The quantity of firm 1 and the quantity of firm 2 go down. The market price goes up.
QUESTION 11 Two firms are competing in a Cournot duopoly. Both firms have the same constant marginal cost. The market demand is linear. Suppose the constant marginal cost of firm 2 is increasing. Which of the following statements are correct? [There may be more than one correct statement.] The quantity of firm 1 goes down and the quantity of firm 2 goes up. The market price stays the same. The quantity of firm 1 and the quantity of firm 2 both go up. The market price goes down. The quantity of firm 1 goes up and the quantity of firm 2 goes down. The quantity of firm 1 and the quantity of firm 2 go down. The market price goes up.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter24: Monopolistic Competition, Oligopoly, And Game Theory
Section: Chapter Questions
Problem 9QP
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