Bert and Ernie are noncolluding oligopolists. If both choose a high price strategy, each makes $40 in profits; if both choose a low price strategy, each makes $30 in profits. If Bert chooses a high price strategy and Ernie chooses a low price strategy, Bert makes $20 in profits and Ernie makes $60 in profits, while if Bert chooses a low price strategy and Ernie chooses a high price strategy, Bert
makes $60 in profits and Ernie makes $20 in profits. Which combination of pricing strategies would you expect Bert and Ernie to adopt if they act independently?
a. Both choose a high price strategy.
b. Both choose a low price strategy.
c. Bert chooses a high price strategy and Ernie chooses a low price strategy.
d. Bert chooses a low price strategy and Ernie chooses a high price strategy.
b
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If the cost of the CPI market basket at current period prices is $1000 and the cost of the CPI market basket at base period prices is $250, the CPI is
A) 2.50. B) 400. C) 250. D) 100. E) 4.0.
According to the Federal Trade Commission and Department of Justice HHI Rules, how concentrated is this market?
a. Not concentrated. b. Moderately concentrated. c. Concentrated. d. Highly concentrated.