and the cost function of the second firm is , where are all positive parameters. The demand function in this industry is where α C(q₁) = A * qu C(92) = Bq₂ (A, B, a, ß) Q = Dp (D,y) Now assume that both firms are in the market and they choose quantities to supply. Assume also that, in equilibrium, firm 1 supplies 1/4 of the market, while firm 2 supplies the remaining 3/4. Then, in equilibrium, Firm 1 and Firm 2 charge the same mark-up (in percent). This mark-up is larger than the mark-up they would charge as monopolists. Firm 1 and Firm 2 charge the same mark-up (in percent). This mark-up is smaller than the mark-up they would charge as monopolists. Firm 1 charges a larger (percentage) mark-up over its costs than firm 2. Firm 1's mark-up is smaller than the mark-up it would charge if it was a monopoly. Firm 1 charges a smaller (percentage) mark-up over its costs than firm 2. However, Firm 1's mark-up is larger than the mark-up it would charge if it was a monopoly. Firm 1 charges a smaller (percentage) mark-up over its costs than firm 2. Firm 1's mark-up is smaller than the mark-up it would charge if it was a monopoly. Firm 1 charges a larger (percentage) mark-up over its costs than firm 2. Firm 1's mark-up is larger than the mark-up it would charge if it was a monopoly.

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and the cost function of the second firm is
, where
are all positive parameters.
The demand function in this industry is
where
α
C(q₁) = A * qu
C(92) = Bq₂
(A, B, a, ß)
Q = Dp
(D,y)

Now assume that both firms are in the market and they choose quantities to supply.
Assume also that, in equilibrium, firm 1 supplies 1/4 of the market, while firm 2
supplies the remaining 3/4. Then, in equilibrium,
Firm 1 and Firm 2 charge the same mark-up (in percent). This mark-up is larger
than the mark-up they would charge as monopolists.
Firm 1 and Firm 2 charge the same mark-up (in percent). This mark-up is smaller
than the mark-up they would charge as monopolists.
Firm 1 charges a larger (percentage) mark-up over its costs than firm 2. Firm 1's
mark-up is smaller than the mark-up it would charge if it was a monopoly.
Firm 1 charges a smaller (percentage) mark-up over its costs than firm 2.
However, Firm 1's mark-up is larger than the mark-up it would charge if it was a
monopoly.
Firm 1 charges a smaller (percentage) mark-up over its costs than firm 2. Firm 1's
mark-up is smaller than the mark-up it would charge if it was a monopoly.
Firm 1 charges a larger (percentage) mark-up over its costs than firm 2. Firm 1's
mark-up is larger than the mark-up it would charge if it was a monopoly.

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