Answer to Question #346929 in Microeconomics for abeni

Question

4 Which of the following is not true about Bertrand’s duopoly model?

Each seller assumes his rival’s output to remain constant.

B it differs from Cournot’s model by its behavioral assumption.

Each seller assumes that their rival’s price to remain constant.

D a & c

E none of the above.

5 According to a kinked demand model, each seller will respond to its rival’s change by

A cut in the price of this commodity

B not follow the change in price.

C reacts to price cut but not price hikes.

D all a to c

6 One of the following is not a reason that brings oligopoly firms into collusion.

A to form an entry barrier for new firms.

B to reduce an oligopolistic risk

C to reduce competition between firms

D to reduce the price of their output.

E none.

Answer 1

4. B

5. C

6. C