QUESTION 2In a Cournot duopoly firm 1's best-response function is downward sloping because when firm 2 produces more:O Firm 1's marginal cost goes up, so firm 1 produces less.O Firm 1's total cost goes up, so firm 1 produces less.O Firm 1's marginal revenue goes down, so firm 1 produces less.O Firm 1's average cost goes up, so firm 1 produces less.

Cournot duopoly is a model of imperfect competition in which two firms with identical cost functions…

QUESTION 2 In a Cournot duopoly firm 1's best-response function is downward sloping because when firm 2 produces more: Firm 1's marginal cost goes up, so firm 1 produces less. Firm 1's total cost goes up, so firm 1 produces less. Firm 1's marginal revenue goes down, so firm 1 produces less. Firm 1's average cost goes up, so firm 1 produces less.

QUESTION 2 In a Cournot duopoly firm 1's best-response function is downward sloping because when firm 2 produces more: Firm 1's marginal cost goes up, so firm 1 produces less. Firm 1's total cost goes up, so firm 1 produces less. Firm 1's marginal revenue goes down, so firm 1 produces less. Firm 1's average cost goes up, so firm 1 produces less.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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