Questions on Game Theory and Oligopoly:

1. A ________ shows how much a firm will produce as a function of how much it thinks its competitors will produce.

A) contract curve

B) demand curve

C) reaction curve

D) Nash equilibrium curve

E) none of the above

2. In the ________, two duopolists compete by simultaneously selecting price.

A) Cournot model

B) Nash model

C) Bertrand model

D) kinked-demand model

E) none of the above

3. In comparing the Cournot equilibrium with the competitive equilibrium,

A) both profit and output level are higher in Cournot.

B) both profit and output level are higher in the competitive equilibrium.

C) profit is higher, and output level is lower in the competitive equilibrium.

D) profit is higher, and output level is lower in Cournot.