Which of the following is true about a differentiated-product Bertrand duopoly?
A. Firm 1 and firm 2's reaction functions are downward sloping.
B. Firm 1 and firm 2's reaction functions are upward sloping.
C. In a differentiated-product Bertrand duopoly neither firm has a reaction function.
D. Firm 1's reaction function is downward sloping but firm 2's reaction function is upward sloping.
Answer: B
You might also like to view...
"Coffee Prices Sink As Demand Falls." The newspaper heading
A) assumes the law of demand does not hold. B) confuses demand with quantity demanded. C) misunderstands the role of supply in price formation. D) reverses the actual relationship between price and demand. E) uses the concept of demand correctly.
The above figure shows a graph of the market for pizzas in a large town. If the price price rises from 7 to 8, what is the change in quantity demanded for pizzas?
A) -10 B) -30 C) -20 D) 20
Suppose your utility function for food (F) and clothing (C) is u(F,C) = F + 4C. If you reduce your clothing consumption by 2 units, how much do you have to increase your food consumption in order to maintain the same utility level?
A) 2 units B) 4 units C) 6 units D) 8 units
A government ban on a good that suffers from overconsumption may be ineffective if the:
A. likelihood of being caught breaking the ban is sufficiently high. B. likelihood of being caught breaking the ban is very low. C. punishment for breaking the ban is severe. D. public did not participate in setting the punishments.