Which Alteration of the Assumptions Behind the Bertrand Model Can

question 8

Multiple Choice

Which alteration of the assumptions behind the Bertrand model can help avoid the Bertrand Paradox (that an outcome resembling perfect competition may arise with even as few as two firms) ?

• A)assume firms have limited capacities.
• B)assume firms produce differentiated rather than homogeneous products.
• C)assume firms play repeatedly and thus may collude.
• D)all of the above.

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Definitions:

P-Value

A statistical metric that helps you determine the significance of your research results, essentially telling you how likely your data would have occurred by random chance.

One-Tail Test

A statistical test where the region of rejection is on only one side of the sampling distribution, used when the research hypothesis predicts a direction of the effect.

Two-Tailed Test

A hypothesis testing approach that allows for the possibility of an effect in two directions, either higher or lower than the null hypothesis, and hence tests for the presence of any significant difference.

Test Statistic

A calculated value that is used in statistical tests to determine whether to reject the null hypothesis, based on sample data.