Two Firms Are in Bertrand Competition with Differentiated Goods

question 67

Multiple Choice

Two firms are in Bertrand competition with differentiated goods. Firm A faces the demand curve q_A = 40 - P_A + 0.50P_B.What is Firm A's total revenue?

• A) TR_A = 40P_A - + 0.50P_AP_B
• B) TR_A = (40 - P_A + 0.50P_A)P_B
• C) TR_A = (40 - P_A + 0.50P_A)q_A.
• D) TR_A = (40 - P_B + 0.50P_B)P_A

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Definitions:

Ownership Percentage

The share or portion of a company that is owned by an individual or entity, typically expressed as a percentage of total outstanding shares.

Voting Stock

Shares that give the shareholder the right to vote on matters of corporate policy and the election of the board of directors.

Common Stock

Shares representing ownership in a corporation, entitling the shareholder to a portion of the corporation's profits and a vote in shareholder meetings.

Preferred Stock

Preferred stock is a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, typically coming with dividend priority.