What factor would not help resolve the Bertrand paradox (that a perfectly competitive outcome can emerge with as few as two firms in the market) if the basic Bertrand model were extended to include it?
a. Repeated interaction
b. Search costs
c. Sequential moves
d. Product differentiation
c
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What does it mean for a country to have an absolute advantage in producing a product?
What will be an ideal response?
The above figure shows the short-run production function for Albert's Pretzels. The law of diminishing marginal productivity
A) appears with the second worker. B) has not yet appeared for any of the levels of labor. C) first appears with the fifth worker. D) is refuted by this evidence.
Under a managed float,
a. a central bank allows the forces of supply and demand to determine the exchange rate b. a nation can have neither a trade deficit nor a trade surplus c. a nation "pegs" its price level to a foreign currency d. a nation "pegs" its price level at some fixed value e. a central bank intervenes in the foreign exchange market to stabilize its exchange rate
In both Gamma and Delta average labor productivity is $40,000 per worker per year. The population of Gamma is 200,000 and the population of Delta is 400,000. Fifty percent of the population in each country is employed. Total output in Gamma is ________ and total output in Delta is ________.
A. $8 billion; $16 billion B. $4 billion; $8 billion C. $100,000; $200,000 D. $2.4 billion; $4.8 billion