In the simplest version of the Cournot model, we assume the firms
A) set price independently and simultaneously.
B) set quantities independently and sequentially.
C) sell identical products.
D) the firms are in a Nash equilibrium.
Question 2
The above figure shows supply and demand curves for milk. If the government passes a 2 per gallon specific tax, the tax revenue is
A) 2 Q1.
B) 2 Q2.
C) 2 (Q2 - Q1).
D) 2.
