Question 1

Consider the market for nonalcoholic beers from the previous question.Which of the following is the Bertrand reaction function for Boors?

Accepted Answer

A)  PB = -2.5 + .05PC 
B)  PB = 2.5 + .05PC 
C)  PC = 2.5 - .05PB 
D)  PB = 2.5 - .15PC  
A)  PB = -2.5 + .05PC 
B)  PB = 2.5 + .05PC 
C)  PC = 2.5 - .05PB 
D)  PB = 2.5 - .15PC

Question 2

Suppose there are two firms,Boors and Cudweiser,each selling identical-tasting nonalcoholic beer.Consumers of this beer have no brand loyalty so market demand can be expressed as   .Boors operates with out of date technology and has constant cost of (MC = AC)$4 per unit where as Cudweiser has constant cost of $2 per unit.Assuming the firms behave as Cournot competitors,in the Nash equilibrium,Cudweiser will produce

Accepted Answer

A)  1,333 
B)  2,333 
C)  3,333 
D)  4,333 
A)  1,333 
B)  2,333 
C)  3,333 
D)  4,333

Question 3

Consider the same market for nonalcoholic beer as in the previous question.How many "units" of beer will Cudweiser produce?

Accepted Answer

A)  667 
B)  1,667 
C)  2,333 
D)  3,000 
A)  667 
B)  1,667 
C)  2,333 
D)  3,000

Question 4

Which game does the Cournot model most resemble and why?

Accepted Answer

A)  the Battle of the Sexes because firms need to coordinate their outputs. 
B)  the Battle of the Sexes because firms disagree on which outcome is best. 
C)  the Prisoners Dilemma because firms don't maximize joint payoffs in equilibrium. 
D)  the Prisoners Dilemma because firms play dominant strategies. 
A)  the Battle of the Sexes because firms need to coordinate their outputs. 
B)  the Battle of the Sexes because firms disagree on which outcome is best. 
C)  the Prisoners Dilemma because firms don't maximize joint payoffs in equilibrium. 
D)  the Prisoners Dilemma because firms play dominant strategies.

Question 5

Product differentiation complicates the study of oligopolies because such markets may not

Accepted Answer

A)  be efficient. 
B)  have prices equal to marginal cost. 
C)  have free entry and exit. 
D)  obey the law of one price. 
A)  be efficient. 
B)  have prices equal to marginal cost. 
C)  have free entry and exit. 
D)  obey the law of one price.

Question 6

All of the following are problems associated with maintaining a cartel except

Accepted Answer

A)  cartels are illegal. 
B)  a large amount of information is needed to coordinate a cartel. 
C)  profits are not maximized by a cartel so it will evolve into a monopoly. 
D)  each member of the cartel has an incentive to "chisel" by expanding output. 
A)  cartels are illegal. 
B)  a large amount of information is needed to coordinate a cartel. 
C)  profits are not maximized by a cartel so it will evolve into a monopoly. 
D)  each member of the cartel has an incentive to "chisel" by expanding output.

Question 7

Consider the market for nonalcoholic beers from the previous question.Boors' price in a Nash equilibrium (assuming Bertrand competition in these differentiated beers)is about

Accepted Answer

A)  1.71 
B)  2.55 
C)  3.55 
D)  4.29 
A)  1.71 
B)  2.55 
C)  3.55 
D)  4.29

Consider the market for nonalcoholic beers from the previous question.Which of the following is the Bertrand reaction function for Boors?

Consider the same market for nonalcoholic beer as in the previous question.How many "units" of beer will Cudweiser produce?

Which game does the Cournot model most resemble and why?

Product differentiation complicates the study of oligopolies because such markets may not

All of the following are problems associated with maintaining a cartel except

Consider the market for nonalcoholic beers from the previous question.Boors' price in a Nash equilibrium (assuming Bertrand competition in these differentiated beers)is about

Economic Models

Utility and Choice

Individual Demand Curves

Uncertainty

Game Theory

Production

Costs

Profit Maximization and Supply

Perfect Competition in a Single Market

General Equilibrium and Welfare

Monopoly

Pricing in Input Markets

Capital and Time

Asymmetric Information

Externalities and Public Goods

Behavioral Economics

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Exam 12: Imperfect Competition

Consider the market for nonalcoholic beers from the previous question.Which of the following is the Bertrand reaction function for Boors?

Consider the same market for nonalcoholic beer as in the previous question.How many "units" of beer will Cudweiser produce?

Which game does the Cournot model most resemble and why?

Product differentiation complicates the study of oligopolies because such markets may not

All of the following are problems associated with maintaining a cartel except

Consider the market for nonalcoholic beers from the previous question.Boors' price in a Nash equilibrium (assuming Bertrand competition in these differentiated beers)is about

Economic Models

Utility and Choice

Individual Demand Curves

Uncertainty

Game Theory

Production

Costs

Profit Maximization and Supply

Perfect Competition in a Single Market

General Equilibrium and Welfare

Monopoly

Pricing in Input Markets

Capital and Time

Asymmetric Information

Externalities and Public Goods

Behavioral Economics

Filters