Question

Assume two firms 1 and 2. The inverse market demand function is given by:             

P=30-(q₁+q₂)

Each firm produces with marginal costs of

MC = 6

Fixed costs are zero.

The next questions refer to the Cournot duopoly.

Question 1 (1 point)

What is Firm 1's total revenue function?

Question 1 options:

	TR1=30q1 -q1 -q22
	TR1=30-2q1-q2
	TR1=30q1 -q12-q2
	None of the above.

Question 2 (1 point)

What is Firm 1's marginal revenue function?

Question 2 options:

	MR1=30-2q1 -q2
	MR1=30-q1-2q2
	MR1=30-2q1-2q2
	None of the above.

Question 3 (1 point)

What is Firm 1's response function?

Question 3 options:

	q1=12-0.5q2
	q1=12-q2
	q1=12-2q2
	None of the above

Question 4 (1 point)

If Firm 1 thinks that Firm 2 chooses to supply q₂=10, then Firm 1's profit maximizing quantity would be q₁*=

Question 4 options:

	6
	7
	8
	10

Question 5 (1 point)

If Firm 2 thinks that Firm 1 chooses to supply q₁=7, then Firm 1's profit maximizing quantity would be q₁*=

Question 5 options:

	6.5
	7.5
	8.5
	9.5

Question 6 (1 point)

In equilibrium, each firm will supply q_i=

Question 6 options:

	5
	6
	7
	8

Question 7 (1 point)

The market price in equilibrium will be P*(q₁+q₂)=

Question 7 options:

	14
	16
	18
	20

Question 8 (1 point)

In equilibrium, each firm's total revenue is equal to TR_i=

Question 8 options:

	106
	108
	110
	112

Question 9 (1 point)

In equilibrium, each firm's total variable cost is TVC_i=

Question 9 options:

	8
	16
	32
	48

Question 10 (1 point)

In equilibrium, each firm's total profit is _i=

Question 10 options:

	32
	40
	48
	64

Question 11 (1 point)

In equilibrium, total consumer surplus is CS=

Question 11 options:

	128
	169
	196
	225

Answer 1