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Firm One and Firm Two Compete as a Cournot Oligopoly

Question 46

Multiple Choice

Firm one and firm two compete as a Cournot oligopoly.There is an increase in marginal cost for firm one.Which of the following is not true?


A) Firm one will produce less.
B) Firm two will produce more.
C) Both firm one's and firm two's reaction functions are shifted.
D) Profits of firm one will decrease.

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