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:

Differential Carriers

The housing component of a differential in a vehicle's drivetrain that holds the gears and bearings, transferring power from the driveshaft to the axle.

Axle Identification

The process or system used to specify the type, specifications, and applicable vehicle for a particular axle.

Banjo Housing

Differential axle carrier housing, so named because of its banjo shape.

Ring Gear Tooth

A tooth on the outer circumference of a ring gear, which engages with a mating pinion to transmit power in drivetrains.