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1. Suppose you have a duopoly with homogenous goods and equal constant marginal costs, c = 2, and an aggregated demand curve given by P
1. Suppose you have a duopoly with homogenous goods and equal constant marginal costs, c = 2, and an aggregated demand curve given by P =11 -Q. Which of the following is true when firms compete a single period. (a) If firms compete in quantities (a la Cournot) the Deadweight Loss (DWL) is 0 (b) If firms compete in quantities (a la Cournot) the Deadweight Loss (DWL) is always smaller than if firms compete in prices (a la Bertrand) (c) If firms compete in quantities (a la Cournot) the Deadweight Loss (DWL) is equal to 4.5 (d) If firms compete in prices (a la Bertrand) the Deadweight Loss (DWL) is 4.5 2 Oligopolies producing homogenous goods, produce the efficient level of output? (a) Yes, if they compete in prices (b) Yes, if they compete in quantities (c) No, porque because there a small number of firms in the market. (d) Yes, whenever firms' profit is zero
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