If two simultaneous move Bertrand price competitors have different constant marginal costs, then any price between their marginal costs could be a Nash equilibrium price.
Answer the following statement true (T) or false (F)
True
Rationale: So long as firm 1 prices just below firm 2 and below firm 2's MC, firm 2 is best responding by pricing just above firm 1. But firm 1 is best-responding only if it prices above its own MC.
You might also like to view...
For the purpose of statistically reporting the unemployment rate, "discouraged workers" are
A) not counted. B) counted. C) trained to do different work. D) offered other jobs.
Consider an economic policy regime in which rules are well-known but frequently ignored. Which of these statements is true?
A) This regime might work in the long-run, but is unlikely to produce good outcomes in the short run. B) Policymakers in this regime might find that rules are being broken with increasing frequency. C) This regime is more likely to be supported by nonactivist, than by activist policymakers. D) This regime is more likely to result in high unemployment than in high inflation. E) This regime is unlikely to produce large government budget deficits.
The short-run supply curve is ________ and the long-run supply curve is ________ in a perfectly competitive market in which all firms have identical cost structures.
A. upward sloping; perfectly elastic B. downward sloping; upward sloping C. perfectly elastic; upward sloping D. upward sloping; upward sloping
Tariffs and quotas are effective in protecting industry
A. but at very high cost per job saved. B. and at very low cost per job saved. C. but have not saved any jobs in the industries. D. and do not distort the economy in the process.