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Author Question: If two firms behave as Cournot duopolists, the level of social welfare is lower than if the same ... (Read 79 times)

nelaaney

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on: Jul 1, 2018
If two firms behave as Cournot duopolists, the level of social welfare is lower than if the same firms act as a cartel.
 
  Indicate whether the statement is true or false

Question 2

The demand for a monopoly's output is p = 200 - Q. The monopoly's production function is Q = 2L, and the market wage is 4. How many units of labor will the monopolist employ at its profit maximization level of output?
 
  A) L = 49.5
  B) L = 4623
  C) L = 198
  D) L = 10
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Laurenleakan

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Reply #1 on: Jul 1, 2018
Answer to Question 1

False. The Cournot duopolists produce more at a lower price than a cartel. Thus, social welfare is lower with a cartel.

Answer to Question 2

A


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nelaaney

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Reply #2 on: Jul 1, 2018
Thank you :)


Laurenleakan

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Reply #3 on: Jul 1, 2018
Happy to help you


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