Options for 1,2,3 are True of False

Consider the Cournot duopoly competition discussed in class. Two firms, Firm 1 and Firm 2, producing identical products, compete in a market. Given the market demand function, which is the same for both firms, each firm decides how much to produce, q1 and q2, respectively, for Firm '| and Firm 2. Choose the appropriate option for the following statements. 1. At the Nash equilibrium (Cournot Equilibrium), each firm's individual profit is maximized. 2. At the Nash equilibrium (Cournot Equilibrium), total profit (the total profit that is available in the market) is maximized. 3. The Nash Equilibrium (Cournot Equilibrium) is Pareto efficient (optimal). 4. Both firms could be better off compared to their payoffs at the Nash Equilibrium (Cournot Equilibrium) if they could write a contract that ensures that the total output, (Ch + qz), i J I the total output, (q1 + q2), at the Nash Equilibrium (Cour I955 than more than