Price And Quantity Determination Under Duopoly - SS2 Economics Past Questions and Answers - page 1
In a duopoly, how many firms dominate the market?
Two
Three
Four
What is the pricing strategy in a duopoly determined by?
Each firm's cost structure
The actions and responses of each firm's competitor
The government's price regulations
The market demand and supply forces
How does a duopoly affect the quantity of goods produced compared to a monopoly?
Each firm produces more goods in a duopoly
Each firm produces less goods in a duopoly
There is no difference in the quantity of goods produced between a duopoly and a monopoly
It depends on the specific market conditions
What is the potential outcome of a price war in a duopoly?
Both firms earn a higher profit
Both firms earn a lower profit
One firm earns a higher profit and the other earns a lower profit
Both firms earn the same profit as in a Nash equilibrium
What is the Nash equilibrium in a duopoly?
The point where one firm dominates the market
The point where both firms produce more goods than in a monopoly
The point where both firms produce less goods and charge a higher price than in a monopoly
The point where both firms produce the same quantity and charge the same price
How does the pricing strategy in a duopoly differ from that of a monopoly?
How does the quantity of goods produced in a duopoly compare to that in a price war?
Suppose there are two firms, A and B, in a duopoly market. The market demand and cost functions are given as follows:
Demand function: P = 100 - Q
Cost function: C = 20Q
where P is the market price, Q is the total quantity of goods produced by both firms, and C is the total cost of production. Assuming that firm A and firm B have equal production costs, what is the Nash equilibrium price and quantity in this duopoly market?