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A duopoly faces the inverse demand curve p  160  2q.Firm 1's total cost function is given by C1(q1)  8q1 and firm 2's total cost function is given by C2(q2)  10q2.In a Cournot equilibrium,

A) the firm with the lower marginal cost produces more.
B) both firms will produce the same amount.
C) the firm with the higher marginal cost produces more to cover the higher costs.
D) the reaction function for both firms is the same since both firms have a constant marginal cost.
E) More than one of the above is correct.

On Mar 10, 2024


A