Author Question: In a Cournot duopoly, we find that Firm 1's reaction function is Q1 = 50 - 0.5Q2, and Firm 2's ... (Read 123 times)

Mr. Wonderful · **on:** Jul 1, 2018

In a Cournot duopoly, we find that Firm 1's reaction function is Q1 = 50 - 0.5Q2, and Firm 2's reaction function is Q2 = 75 - 0.75Q1. What is the Cournot equilibrium outcome in this market?

A) Q1 = 20 and Q2 = 60
B) Q1 = 20 and Q2 = 20
C) Q1 = 60 and Q2 = 60
D) Q1 = 60 and Q2 = 20

Question 2

Bundling is effective when the demands for the bundled products are ________ and ________ correlated.

A) different; negatively
B) different; positively
C) similar; negatively
D) similar; positively
E) identical; perfectly