Author Question: In a Duopoly Nash-Cournot equilibrium, A) neither firm has an incentive to change its output ... (Read 47 times)

Awilson837 · **on:** Jul 1, 2018

In a Duopoly Nash-Cournot equilibrium,

A) neither firm has an incentive to change its output level given the other firm's output decision.
B) firms will choose the pair of quantities above the intersection of the two best response functions.
C) firms will choose the pair of quantities below the intersection of the two best response functions.
D) firms will choose its quantity regardless of the other firm's output decision.

Question 2

In the kinked demand curve model, the demand curve is ________ for price increases and ________ for price decreases.

A) unit elastic; relatively elastic
B) relatively inelastic; relatively elastic
C) relatively elastic; relatively inelastic
D) perfectly elastic; perfectly inelastic