Which of the following is true about a differentiated-product Bertrand duopoly?
A. Firm 1 and firm 2's prices will equal marginal cost.
B. Firm 1 and firm 2's prices will exceed marginal cost.
C. Firms in a differentiated-product Bertrand duopoly cannot earn positive economic profits in the long run.
D. Firm 1's price will always be above marginal cost, while firm 2's price will be equal to marginal cost.
Answer: B
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The oldest hamburger chain in the United States is White Castle, which was founded in 1921 . Most of their restaurants in the early days were located in urban areas. In the 1950s they lost much of their business to McDonalds and Burger King
They were slow to respond in building restaurants on highways and in suburbs. How did the advent of the highway system in the 1950s alter residential location patterns and how might this have affected the marginal revenue product of burger chains in both urban and suburban areas. Why did sales drop off in the urban areas where White Castle had earned its initial success?
Refer to Scenario 12.2. What is the profit maximizing price?
A) 205.72 B) 240 C) 210 D) all of the above E) none of the above
If the income-consumption path slopes down, then:
A. both goods are inferior. B. both goods are normal. C. one good is normal and the other good is inferior. D. we can't tell anything about whether the goods are normal or inferior.
What is the slope of the line of aggregate expenditure plotted against output in equilibrium?
a. 0.0 b. 0.5 c. 1.0 d. 1.5