For a market with a linear demand curve and constant marginal cost of production, why are the reaction functions for the Cournot duopoly sellers also straight lines?
A) The reaction functions do not have to be straight lines, and they are only drawn this way in the book to keep the figures simple.
B) Cournot thought the lines would be straight, but this was proven wrong by other economists.
C) Marginal revenue is always linear when marginal costs are constant.
D) We know that the marginal revenue curves for linear demand curves are also straight lines.

Question

Quizplus · Accepted Answer

The marginal revenue curves for linear demand curves are also straight lines, so the reaction functions for the Cournot duopoly sellers will also be straight lines. This is because the sellers will adjust their output in response to changes in their competitor's output in a linear manner, based on the slope of the demand curve.

For a Market with a Linear Demand Curve and Constant