The logic of self-interest causes the duopoly's output level to be which of the following?
(i) above the monopoly level
(ii) above the oligopoly level
(iii) below the competitive level
A)(i) and (ii)
B)(i) and (iii)
C)(ii) and (iii)
D)(i), (ii) and (iii)

Question

Quizplus · Accepted Answer

The logic of self-interest causes firms in a duopoly to produce where marginal revenue equals marginal cost, which is below the monopoly level but above the competitive level. Therefore, the output level will be below the monopoly level (option i) but above the competitive level (option iii). Option ii is not applicable as it refers to the oligopoly level, which is not directly relevant to the output level in a duopoly. Hence, option B is the best choice.

The Logic of Self-Interest Causes the Duopoly's Output Level to Be