In long-run perfectly competitive equilibrium, which of the following is false?
A) There is efficient, low-cost production at the minimum efficient scale.
B) Economies of scale are exhausted.
C) Economic surplus is maximized.
D) Firms earn economic profit.
D
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The above figure shows the reaction functions for two pizza shops in a small isolated town. The Stackelberg leader will produce
A) 25 pizzas. B) 50 pizzas. C) 66.7 pizzas. D) 100 pizzas.
Management and a labor union are bargaining over how much of a $50 surplus to give to the union. The $50 is divisible up to one cent. The players have one shot to reach an agreement. Management has the ability to announce what it wants first, and then the labor union can accept or reject the offer. Both players get zero if the total amounts asked for exceed $50. Which of the following is true?
A. ($25, $25) is a Nash equilibrium. B. There are multiple Nash equilibria. C. There are multiple Nash equilibria, and ($25, $25) is a Nash equilibrium. D. A Nash equilibrium is also a perfect equilibrium.