If Bertrand price competitors incur recurring fixed costs, it will still be a Nash equilibrium for price to equal marginal cost.
Answer the following statement true (T) or false (F)
False
Rationale: At price equal to marginal cost, the firms would make a negative profit (if marginal cost is constant) when there is a recurring fixed cost. They would therefore not be best-responding to each other by setting price equal to marginal cost.
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If voters lack an economic incentive to become informed about pending legislation, then their preferences become a constraint on legislators voting for rent-seeking legislation
Indicate whether the statement is true or false
The real interest rate can be thought of as
A) the price of current consumption relative to future consumption. B) the price of current consumption completely smoothed over a lifetime. C) the price of future consumption smoothed completely over a lifetime. D) the price of current consumption divided by the price of current saving.
Which of the following statements is true in the context of the long run?
a. All the factors of production are fixed. b. No new firms enter the market. c. The producer can vary all the factors of production. d. The firms earn positive economic profit. e. Large firms tend to acquire market power.
When prices on science fiction novels decreased by 5%, the quantity demanded increased by 20%. The price elasticity of demand is
a. 4. b. 20. c. 0.25. d. 5.