Question content area

Part $1$

Will the price be lower if duopoly firms set price or if they set$$ quantity? Under what conditions can you give a definitive answer to this$$ question?

Part $2$

A$.$

If duopoly firms produce an identical$$ good, then price will be lower if they set$$ price; if the goods are$$ heterogeneous, then the answer is indeterminate.

B$.$

Price will always be the same regardless of whether duopoly firms set price or quantity.

C$.$

If duopoly firms produce a heterogeneous$$ good, then price will be lower if they set

quantityquantity$$;

if the goods are$$ identical, then price will always be the same regardless of whether duopoly firms set price or quantity.

D$.$

Price will always be lower if duopoly firms set

quantityquantity.

E$.$

If duopoly firms produce

a heterogenousa$$heterogenous

$$good$,$ then price will be lower if they set$$ quantity; if the goods are

identicalidentical$,$

then price will be lower if they set price.