Is there a first-mover advantage in the Bertrand duopoly model with homogenous products?
A) Yes, first-movers always hold the advantage over other firms.
B) Yes, first-movers may have an advantage, but it depends on the model assumptions.
C) No, first-movers cannot choose a profit maximizing quantity because the second-mover can always produce a bit less and earn higher profits.
D) No, the second-mover would be able to set a slightly lower price and capture the full market share.
D
You might also like to view...
Refer to Figure 9.2. A movement from point d to point a could be caused by a simultaneous ________ and ________
A) increase in the money supply; massive crop failure B) decrease in the money supply; increase in the price of oil C) decrease in taxes; decrease in the money supply D) decrease in government spending; decrease in the price of oil
In 2011, apples cost $1.49 a pound. Suppose the CPI was 120 in 2011 and 140 in 2012. If there is no change in the real price of an apple in 2012, what is the price of a pound of apples in 2012?
A) $2.74 B) $1.69 C) $1.66 D) $1.74 E) $1.28
The economy enters the long-run once:
A. Nominal wages become equal to real wages B. Real wages become equal to nominal wages C. Sufficient time has elapsed for wage contracts to expire and nominal wages to adjust to output-price changes D. Sufficient time has elapsed for real GDP to increase and unemployment to decrease as a consequence
The AD curve is derived by adding up demand curves for all goods and services
a. True b. False