The market demand in a Bertrand duopoly is P = 10 ? 3Q, and the marginal costs are $1. Fixed costs are zero for both firms. Which of the following statement(s) is/are true?
A. Profits of firm 1 = profits of firm 2.
B. Producer's surplus of firm 1 = producer's surplus of firm 2.
C. P = $1.
D. All of the statements associated with this question are correct.
Answer: D
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Which of the following best describes average variable cost?
a. The change in total cost when one additional unit of output is produced. b. Total cost divided by the quantity of output produced. c. Total variable cost divided by the quantity of output produced. d. Total fixed cost divided by the quantity of output produced. e. Costs that do not vary as output varies.
In any country, the population will generally be better off as long as the ____ over time and population ____
a. quantity and quality of output decreases; does not increase faster than real output b. quantity and quality of output increases; increases faster than real output c. quantity and quality of output increases; does not increase faster than real output d. technology improves; increases faster than real output