The Equilibrium of the Bertrand Model with Differentiated Goods Is

question 136

Multiple Choice

The equilibrium of the Bertrand model with differentiated goods is found by:

• A) setting price equal to marginal cost for each good.
• B) setting quantity demanded equal to quantity supplied for each good.
• C) solving for the intersection of the reaction curves in which each good's price is expressed as function of the other good's price.
• D) solving for the intersection of the reaction curves in which each good's quantity is expressed as function of the other good's quantity.

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Definitions:

Vroom's Expectancy Theory

A theory that proposes an individual's motivation is affected by the expectation that one's effort will lead to desired performance and the value of the reward associated with that performance.

Outcomes Of Behavior

The results or consequences that follow from one's actions or conduct.

Rewards

Benefits, compensations, or other forms of recognition provided to individuals or groups in response to their performance or behavior.

Equity Ratio

A financial metric used to measure a company's level of indebtedness by comparing total equity to total assets.