Let Firm a Face Demand Curve Q_A = 100 -

question 35

Multiple Choice

Let firm A face demand curve Q_A = 100 - P_A + .5P_B and firm B face demand curve Q_B = 100 - P_B + .5P_A. Products A and B both have constant marginal cost of production of 10 per unit (and no fixed cost) . Each firm acts as a Bertrand competitor. What is firm B's profit-maximizing price when firm A sets a price of $70 for its good?

• A) $70
• B) $72.5
• C) $74
• D) $76.5

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Definitions:

Learning Disorders

Neurologically-based processing problems that can interfere with learning basic skills such as reading, writing, or math, as well as higher level skills like organization and time planning.

Age

The length of time that a person or entity has existed; often related to biological, social, and legal definitions.

Dyslexia

A reading disorder that involves difficulties not only in the recognition but also in the comprehension of words. Reading is often very slow and characterized by omitted, substituted, or distorted words. Such difficulties often extend to spelling as well. Also referred to as reading disorder.