1.) Suppose you have 5 identical Bertrand (price-competing) firms with MC for each equal to $10. The market elasticity of demand is -2.0. What is the market price? a. none of the available options. b. $10 c. $12.50 1d. 0.71.
1.) Suppose you have 5 identical Bertrand (price-competing) firms with MC for each equal to $10. The market elasticity of demand is -2.0. What is the market price? a. none of the available options. b. $10 c. $12.50 1d. 0.71.
Chapter15: Oligopoly And Strategic Behavior
Section: Chapter Questions
Problem 11P
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Question
1.) Suppose you have 5 identical Bertrand (price-competing) firms with MC for each equal to $10. The market elasticity of demand is -2.0. What is the market price?
a. none of the available options.
b. $10c. $12.50
1d. 0.71.
2.)
Reconsider the previous question. Suppose 2 new price-competing firms enter the market. What will be the market price?
a. none of the available options.
b. $11.11c. $9.09.
d. $10.
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Reconsider the previous question. Suppose 2 new price-competing firms enter the market. What will be the market price?
a. none of the available options.
b. $11.11c. $9.09.
d. $10.
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