A Bertrand Model of Oligopoly Is One in Which Competing

question 43

Multiple Choice

A Bertrand model of oligopoly is one in which competing firms:

• A)collusively choose price in order to maximize individual profits.
• B)take a rival's output as given and subsequently choose a price that maximizes individual profits.
• C)independently choose quantity in order to maximize individual profits.
• D)independently choose prices in order to maximize individual profits.

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Definitions:

Invests

The act of allocating resources, usually money, with the expectation of generating an income or profit.

Present Value

The present value of a sum of money or sequence of cash flows expected in the future, calculated using a certain rate of return.

Discounting

A financial process of determining the present value of a payment or a series of payments that will be made in the future.

Savings Account

A deposit account held at a financial institution that provides principal security and a modest interest rate.