Firm A has a higher marginal cost than firm B. They compete in a homogeneous product Cournot duopoly. Which of the following results will NOT occur? A) Q_A

Question

Firm A has a higher marginal cost than firm B. They compete in a homogeneous product Cournot duopoly. Which of the following results will NOT occur? A) Q_A < Q_B B) Profit_A < Profit_B C) Revenue of firm A < Revenue of firm B D) Price_A < Price_B

Quizplus · Accepted Answer

Since firm A has a higher marginal cost than firm B, its production quantity will be lower than firm B's production quantity. This means that firm A will have a higher price than firm B. Therefore, the result that will not occur is that Price_A < Price_B.

Firm a Has a Higher Marginal Cost Than Firm B