The Market Demand in a Bertrand Duopoly Is P =

question 99

Multiple Choice

The market demand in a Bertrand duopoly is P = 10 − 3Q,and the marginal costs are $1.Fixed costs are zero for both firms.Based on this information we can conclude that:

• A) P = $7 and firm 1 will sell 7 units of output.
• B) P = $1 and firms 1 and 2 will each sell 7 units of output.
• C) P = $1 and firms 1 and 2 will each sell 1.5 units of output.
• D) P = $1.5 and firms 1 and 2 will each sell 10 units of output.

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Definitions:

Quantity Variances

The difference between the expected amount of inputs needed for production and the actual amount used, often analyzed in cost accounting to assess efficiency.

Standard Costs

Predetermined or estimated costs of manufacturing, selling, or performing a service, used as targets and benchmarks against actual costs.

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, based on the standard rate and actual hours worked.

Direct Labor Time Variance

A measure used in cost accounting to analyze the difference between actual hours worked and the standard hours expected for a task.