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Questions › IIT JAM › IIT JAM 2026 › Q56
2 marksMicroeconomics › Monopolistic competition and oligopoly › Cournot competitionHardabout 4 min

IIT JAM 2026 Question 56: Monopolistic competition and oligopoly

A duopoly market has demand P=120−0.6QP=120-0.6QP=120−0.6Q with Q=Q1+Q2Q=Q_1+Q_2Q=Q1​+Q2​, and cost functions C1=6Q1C_1=6Q_1C1​=6Q1​ and C2=0.5Q22C_2=0.5Q_2^2C2​=0.5Q22​, where PPP is unit price, CiC_iCi​ is the cost function and QiQ_iQi​ is the output of firm iii. The total output (Q)(Q)(Q) produced by the duopolists ignoring their interdependence is ________ (rounded off to two decimal places).

Answer and worked solution

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Plain-text version

A duopoly market has demand P=120-0.6Q with Q=Q₁+Q₂, and cost functions C₁=6Q₁ and C₂=0.5Q₂², where P is unit price, Cᵢ is the cost function and Qᵢ is the output of firm i. The total output (Q) produced by the duopolists ignoring their interdependence is (*rounded off to two decimal places*).

Also written as: A duopoly market has demand P=120-0.6Q with Q=Q_1+Q_2, and cost functions C_1=6Q_1 and C_2=0.5Q_2^2, where P is unit price, C_i is the cost function and Q_i is the output of firm i. The total output (Q) produced by the duopolists ignoring their interdependence is (*rounded off to two decimal places*).

Monopolistic competition and oligopoly has come up 104 times in 7 exams since 2004.

What this question tests

This question is on Cournot competition, part of Monopolistic competition and oligopoly in Microeconomics.

Firms choosing quantities simultaneously, reaction curves, and equilibrium as the number of firms or costs change.

TestStop has 31 past-paper questions on this subtopic; the nearest in year are below.

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Question from the IIT JAM 2026 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.