Due to a recession in the US, the average rate of return on investments is likely to fall causing the US dollar to

If the natural monopoly shown in the figure above is unregulated, it will make an economic profit of

A) $2 million. B) $4 million. C) $9 million. D) $0, that is, it earns a normal profit.

Two firms engage in Bertrand competition in differentiated products. After doing all the appropriate calculations, you find the best-response functions are PB = 2.5 + .15PC and PC = 1.5 + .075PB. Without doing any further calculations, can you determine the relationship between their Nash equilibrium prices?

a. Yes, PB > PC b. Yes, PC > PB c. Yes, PB = PC d. No; it cannot be determined.