The correct answer is: A. half the output.
In a simple Cournot duopoly model, each duopolist will produce half the output that would be produced by a monopolist. This is because each duopolist takes the other duopolist’s output as given when making its own production decision. As a result, each duopolist produces less than the monopoly output, which leads to a higher price and lower consumer surplus.
Option B is incorrect because each duopolist produces half the output that would be produced by a monopolist, not one-fourth the output.
Option C is incorrect because each duopolist produces half the output that would be produced by a monopolist, not one-third the output.
Option D is incorrect because each duopolist produces half the output that would be produced by a monopolist, not one-fifth the output.