Economics · Microeconomics
Given below are two statements — one is labelled as Assertion (A) and the other as Reason (R). Assertion (A): For a symmetric duopoly with linear inverse demand P = a – bQ and identical constant MC = c, the output ranking (from highest to lowest total market output) is: Perfect Competition > Cournot > Stackelberg > Monopoly. Reason (R): In Stackelberg equilibrium the leader internalises the follower's reaction function, enabling the leader to produce more than the Cournot quantity, but total Stackelberg output (3(a–c)4b) is still less than the perfectly competitive output (a–cb). In light of the above statements, choose the correct answer:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1Both (A) and (R) are false
- 2(A) is false, but (R) is true✓
- 3Both (A) and (R) are true, but (R) is NOT the correct explanation of (A)
- 4Both (A) and (R) are true, and (R) is the correct explanation of (A)
Correct answer
(A) is false, but (R) is true
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Microeconomics MCQs →Want more practice questions on Microeconomics?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Microeconomics