The range of output for a duopoly ranges between the
A) perfectly competitive outcome and the monopolistically competitive outcome.
B) efficient scale and the perfectly competitive outcome.
C) minimum of ATC and the efficient scale.
D) monopoly outcome and the perfectly competitive outcome.
E) short-run perfectly competitive outcome and the long-run perfectly competitive outcome.

Question

Quizplus · Accepted Answer

The range of output for a duopoly ranges between the monopoly outcome (where one firm produces the entire output and charges a higher price) and the perfectly competitive outcome (where both firms produce at the minimum of their AC curve and charge a lower price). In a duopoly, both firms have some market power, but they are also in competition with each other, so they try to balance their market power and profit maximization goals. The range of output that they choose depends on a variety of factors, including the shape of their demand and cost curves, the level of advertising, entry barriers, and the existence of any collusion or strategic behavior.

The Range of Output for a Duopoly Ranges Between the