Question
True/False questions are presented in groups of five, so that questions 1-5 refer to one topic, questions 6-10 refer to another topic, etc. You will
True/False questions are presented in groups of five, so that questions 1-5 refer to one topic, questions 6-10 refer to another topic, etc. You will receive 2 points for each question answered correctly and 0 points for each question answered incorrectly or left blank.
Since there is no penalty for guessing, even if you have no idea how to answer a question, you should still choose an answer for it.
The anti-seizure medication fosphenytoin (or "fospheny," for short) is produced by two firms: Mylan and Amneal. If Mylan and Amneal set their manufacturing capacities to produce qMand qAthousand vials per year, respectively, then the market price will be
P(qtot)=150536qtot,
where qtot=qA+qM,and price is given in dollars per vial. Assume throughout that the marginal cost of producing a vial of fospheny is zero. The two firms simultaneously choose their capacities as in the Cournot model.
If Amneal sets its capacity to produce qAthousand vials per year, then Mylan maximizes its profit by setting its own capacity to produce 54014qAthousand vials per year.
Group of answer choices
True. or False
At Nash equilibrium, each firm produces 360 thousand vials of fospheny per year.
Group of answer choices
True or False
At Nash equilibrium, each firm makes a profit (gross of sunk costs) of $10 million per year.
Group of answer choices
True or False
For Questions 4 and 5, suppose each firm incurs a (non-sunk) fixed cost of $15 million per year if it chooses to operate (i.e., produce any vials of fospheny).
Are the following statements true or false?
Suppose Mylan produces 360 thousand vials of fospheny per year. Then, Amneal's best response is to produce 420 thousand vials of fospheny per year.
Group of answer choices
True or False
Suppose Mylan chooses its quantity assuming Amneal does not operate. Then Amneal will choose to operate.
Group of answer choices
True or False
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