Two identical firms that share a market and produce a homogeneous good will find the Bertrand Oligopoly LEAST attractive because
A) Cartels generate the highest joint profit.
B) a Cournot Oligopoly will generate more profit than a Bertrand Oligopoly.
C) they want to avoid a price war that leads to profit erosion and P = MC.
D) All of the above.
D
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Jerry spends his entire income on two goods, Bran and Tea. Every month he spends half of his income on each of these goods. Jerry's income elasticity of demand for Bran is -.75. What is the income elasticity of demand for Tea?
A) 2.75 B) 0.36 C) -2.75 D) Unknown with the information provided
Which of the following statements is TRUE about the economic profits earned by a monopolistic competitor firm in the long run?
A) Economic profits can be positive since firms have some degree of monopoly power. B) Economic profits will be positive since the firm has a downward sloping demand curve. C) Economic profits will tend towards zero since positive profits will attract new firms into the industry. D) Economic profits can be negative since there is so much competition in the market.
Which of the following would not be considered a negative externality?
a. loud rap music at 2 a.m. in the apartment next door to you b. traffic congestion c. an Alaskan oil spill d. measles vaccinations e. air pollution
Under adaptive expectations theory, a decrease in the short-run aggregate demand curve ____ the inflation rate and ____ the unemployment rate.
A. increases; increases B. increases; decreases C. decreases; increases D. decreases; decreases