Suppose there are two firms that face a linear demand curve and have constant marginal costs for each firm. The Cournot equilibrium outputs of the firms are
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2 marks, −1MicroeconomicsMonopolistic competition and oligopolyCournot competitionModerateabout 2 min
JNU SIS 2017 Question 25: Monopolistic competition and oligopoly
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Suppose there are two firms that face a linear demand curve p(Y) = a - bY and have constant marginal costs c for each firm. The Cournot equilibrium outputs of the firms are (A) (a - b) / 3c (B) (a - c) / b (C) (a - c) / 3b (D) (a - 3c) / b
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.
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