Suppose two Cournot duopolist firms operate at zero marginal cost. The market demand is p = a - bQ. Firm 1's best-response function is
A) q1 = (a - bq2 )/2b.
B) q1 = (a - 2bq2 )/2b.
C) q1 = a/b.
D) q1 = a/2b.
A
You might also like to view...
Firms buy and sell the right to pollute: a. under a system of compliance standards
b. under a free market system where there is no government intervention and property rights are not well-defined. c. under a system of transferable pollution permits. d. under a pollution tax system.
An increase in the tax rate on interest income
a. raises the amount earned on savings. Saving will rise if the income effect of the increase in the tax rate is larger than the substitution effect. b. raises the amount earned on savings. Saving will rise if the income effect of the increase in the tax rate is smaller than the substitution effect. c. reduces the amount earned on savings. Saving will fall if the income effect of the increase in the tax rate is larger than the substitution effect. d. reduces the amount earned on savings. Saving will fall if the income effect of the increase in the tax rate is smaller than the substitution effect.