Which of the Following Is an Assumption in the Two-Sided

question 15

Multiple Choice

Which of the following is an assumption in the two-sided search model about the matching function?

• A)The increase in matches from an increase in Q is decreasing in Q.
• B)The increase in matches from an increase in A is increasing in A.
• C)The increase in matches from an increase in Q is increasing in Q.
• D)The number of matches increases if Q increases but A decreases.
• E)The number of matches increases if Q or A decrease.

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Definitions:

Firm's Production

The total output of goods or services produced by a company during a specific period.

Inverse Demand

is a concept in economics that represents the relationship between the price and the quantity demanded, showing how price can be expressed as a function of quantity.

Cournot Duopolists

Firms in a duopoly (market dominated by two companies) that follow the Cournot model, basing their decisions on the quantities produced by their competitors, aiming to maximize profits.

Total Cost

The aggregate expenditure incurred in the production of goods or services, including both fixed and variable costs.