23.Two firms sell 100% orange juice in 10 ounce bottles. The juice is only good for one week. The two firms have contracts for all the oranges produced in a large geographic area. Each firm decides how many bottles of juice to produce at the same time. This market is best described with a ______ A. Bertrand model. B. Cournot model. C. monopolistic competition model. D. Stackelberg model 24.Firms A and B are identical, produce identical products, and are the only firms in a market. Firm A's output is higher than Firm B's. This means that Firm B is the ______ A. Stackelberg follower. B. Cournot leader. C. Stackelberg leader. D. Cartel leader. 25.Assuming a homogeneous product, the Bertrand duopoly equilibrium price is ______ A. greater than the Cournot equilibrium price. B. less than the Cournot equilibrium price. C. the same as the Cournot equilibrium price. D. equal to the monopoly price.
23.Two firms sell 100% orange juice in 10 ounce bottles. The juice is only good for one week. The two firms have contracts for all the oranges produced in a large geographic area. Each firm decides how many bottles of juice to produce at the same time. This market is best described with a ______
A. Bertrand model.
B. Cournot model.
C.
D. Stackelberg model
24.Firms A and B are identical, produce identical products, and are the only firms in a market. Firm A's output is higher than Firm B's. This means that Firm B is the ______
A. Stackelberg follower.
B. Cournot leader.
C. Stackelberg leader.
D. Cartel leader.
25.Assuming a homogeneous product, the Bertrand duopoly
A. greater than the Cournot equilibrium price.
B. less than the Cournot equilibrium price.
C. the same as the Cournot equilibrium price.
D. equal to the
26.Suppose two Cournot duopolist firms operate at zero marginal cost. The market demand is p = a - bQ. Firm 1's best-response function is ______
A. = a/b.
B. = (a - b)/2b.
C. = (a - 2b)/2b.
D. = a/2b.
27.In the Cournot model, a firm maximizes profit by selecting ______
A. its output, assuming that other firms keep their output constant.
B. its price, assuming that other firms will retaliate.
C. its price, assuming that other firms keep their price constant.
D. its output, assuming that other firms will retaliate
28.The outcome of the Stackelberg model is ______
A. that the follower cannot be on its best-response curve.
B. the same as the Cournot outcome.
C. that the follower earns zero profit.
D. a Nash equilibrium
29. As the number of firms increases in a market, the differences between the Cournot, Stackelberg, and price-taking market structures ______
A. increases.
B. decreases.
C. remains the same.
D. cannot be determined.
30.In the Cournot model, the output that a firm chooses to produce increases as ______
A. the total output of other firms increases.
B. its marginal cost increases.
C. the number of firms in the market increases.
D. the number of firms in the market decreases.
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