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-Consider Figure 8

Question 8

Multiple Choice

-Consider Figure 8.4 which depicts two firms producing a homogeneous product at the same constant marginal cost. The Bertrand-Nash equilibrium: A) Occurs when both firms charge a zero price. B) Occurs when both firms charge a price equal to marginal cost. C) Occurs when both firms earn zero economic profit. D) Is the same as you would expect to see in a Cournot industry. E) Answers b and c.
-Consider Figure 8.4 which depicts two firms producing a homogeneous product at the same constant marginal cost. The Bertrand-Nash equilibrium:


A) Occurs when both firms charge a zero price.
B) Occurs when both firms charge a price equal to marginal cost.
C) Occurs when both firms earn zero economic profit.
D) Is the same as you would expect to see in a Cournot industry.
E) Answers b and c.

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