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M8- Graded Quiz

M8- Graded Quiz

Q 1. If a firm's marginal costs then its 2. Suppose two Cournot duopolist firms operate at zero marginal cost. The market demand is p = a - bQ. Firm 1's best-response function is 3. A merger between two firms that produce identical goods would be called 4. In the Cournot model, a firm maximizes profit by selecting 5. In a Bertrand model with identical products

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1. fall; best-response curve shifts 2. q1 = (a - bq2)/2b 3. a horizontal merger 4. its output, assuming that other firms keep their output constant 5. price is the same as in a competitive market equilibrium