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CellBat and DuraBat Are the Only Makers of Lawn Mower

Question 64

Multiple Choice

CellBat and DuraBat are the only makers of lawn mower batteries. Their batteries are identical, produced at a constant marginal cost of $25. The market inverse demand curve for lawn mower batteries is P = 145 - 0.5Q, where Q is the total output produced by CellBat and DuraBat, qC + qD. How many batteries will each firm produce in Cournot equilibrium?


A) CellBat and DuraBat will each produce 60 batteries.
B) CellBat will produce 40 batteries, and DuraBat will produce 80 batteries.
C) CellBat and DuraBat will each produce 80 batteries.
D) CellBat and DuraBat will each produce 90 batteries.

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