In a duopoly situation, the logic of self-interest results in a total output level that
A)equals the output level that would prevail in a competitive market.
B)equals the output level that would prevail in a monopoly.
C)exceeds the monopoly level of output, but falls short of the competitive level of output.
D)falls short of the monopoly level of output.

Question

Quizplus · Accepted Answer

In a duopoly, firms act in their self-interest, leading to an output level that is higher than a monopoly (where one firm restricts output to maximize profit) but lower than in perfect competition (where many firms produce at a level where price equals marginal cost).

In a Duopoly Situation, the Logic of Self-Interest Results in a Total