a-f all options are either yes/no Consider an industry composed of only two firms, each producing an identical product. Thetwo firms have identical constant marginal costs of production, zero fixed costs, and behaveas leader-follower (Stackelberg duopolists). Which of the following conditions will hold inequilibrium?a) at least one firm makes zero profitb) both firms make decisions at the sametimec) the firm that moves first will makelower profit than the other firmd) one of the firms chooses its price firste) the combined profit of Stackelbergduopolists is higher than that of Bertrandduopolistsf) the equilibrium price is greater than thequilibrium price under perfectcompetition but less than the equilibriurprice in a Cournot model of duopoly[Choose ][Choose ][Choose ][Choose ][Choose ]✓ [Choose ]noyes

Perfect competition is an ideal kind of market structure where all makers and buyers have full and…

ader-follower (Stackelberg duopolists). Which of the following conditions ibrium? least one firm makes zero profit th firms make decisions at the same e firm that moves first will make r profit than the other firm [Choose ] Choose ] [Choose ] > >

ader-follower (Stackelberg duopolists). Which of the following conditions ibrium? least one firm makes zero profit th firms make decisions at the same e firm that moves first will make r profit than the other firm [Choose ] Choose ] [Choose ] > >

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

a-f

all options are either yes/no

Consider an industry composed of only two firms, each producing an identical product. The
two firms have identical constant marginal costs of production, zero fixed costs, and behave
as leader-follower (Stackelberg duopolists). Which of the following conditions will hold in
equilibrium?
a) at least one firm makes zero profit
b) both firms make decisions at the same
time
c) the firm that moves first will make
lower profit than the other firm
d) one of the firms chooses its price first
e) the combined profit of Stackelberg
duopolists is higher than that of Bertrand
duopolists
f) the equilibrium price is greater than th
equilibrium price under perfect
competition but less than the equilibriur
price in a Cournot model of duopoly
[Choose ]
[Choose ]
[Choose ]
[Choose ]
[Choose ]
✓ [Choose ]
no
yes

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