If two duopolists arrive at the Nash equilibrium output level,the total quantity of the good on the market will be ________ the total quantity on the market if the market were perfectly competitive and ________ the total quantity on the market if the market were controlled by a monopoly.
A) less than; less than
B) less than; greater than
C) greater than; greater than
D) greater than; less than
E) greater than; equal to

Question

Quizplus · Accepted Answer

In a Nash equilibrium for duopolists, the total quantity of the good on the market is less than in a perfectly competitive market because firms have some market power and restrict output to raise prices. However, it is greater than in a monopoly, where a single firm has even more market power and restricts output further to maximize profits.

If Two Duopolists Arrive at the Nash Equilibrium Output Level,the