Refer to Scenario 12.2. Suppose that the marginal cost falls such that: MC = Q - 10 What is the profit maximizing price?

How does the natural unemployment rate change and what factors might make it change?

What will be an ideal response?

The subgame-perfect equilibrium of a two-stage game in which firms first choose capacities and then engage in a Bertrand price setting game resembles the equilibrium in:

a. the competitive model. b. the Cournot model. c. the cartel model. d. the price leadership model.