Which of the Following Is True About a Differentiated-Product Bertrand

question 54

Multiple Choice

Which of the following is true about a differentiated-product Bertrand duopoly?

• A) Firm 1 and firm 2's prices will exceed marginal cost.
• B) Firm 1 and firm 2's prices will equal marginal cost.
• C) Firm 1's price will always be above marginal cost, while firm 2's price will be equal to marginal cost.
• D) Firms in a differentiated-product Bertrand duopoly cannot earn positive economic profits in the long run.

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Definitions:

Conjunctival Sac

The thin, protective space between the eyelid and the eye itself, where eye drops or medications can be administered.

Eye Drops

A liquid medication or solution administered into the eye to treat a variety of conditions, such as infections, dryness, or glaucoma.

Gregarious

Characterized by a love of being in the company of others; sociable.

Sociable

The characteristic of being inclined to seek out and enjoy the company of others, often characterized by friendliness and the ability to interact well in social situations.