Fixedcosts

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Unformatted text preview: demand they face is P = 100 ‐ 2Q. The cost function for each firm is C(Q) = 4Q. In equilibrium, the deadweight loss is: A. $128. B. $256. C. $384. D. $512. 10. Which firm would you expect to make the lowest profits, other things equal? A. Bertrand oligopolist. B. Cournot oligopolist. C. Sweezy oligopolist. D. Stackelberg leader. 11. The market demand in a Bertrand duopoly is P = 15 ‐ 4Q, and the marginal costs are $3. Fixed costs are zero for both firms. Which of the following statement(s) is/are true? A. P = $3. B. P = $10. C. P = $15. D. None of the statements associated with this question are correct. 2 12. Consider a Cournot duopoly with the following inverse demand function: P = 100 ‐ 2Q1 ‐ 2Q2. The firms' marginal cost are identical and given by MCi(Qi) = 2Qi. Based on this information firm 1 and 2's marginal revenue functions are A. MR1(Q1,Q2) = 100 ‐ 2Q1 ‐ Q2 and MR2(Q1,Q2) = 100 ‐ Q1 ‐ 2Q2. B. MR1(Q1,Q2) = 100 ‐ 4Q1 ‐ 2Q2 and MR2(Q1,Q2) = 100 ‐ 2Q1 ‐ 4Q2...
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This note was uploaded on 12/10/2012 for the course ECON 5501 taught by Professor Wing during the Fall '12 term at City University of Hong Kong.

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