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?

John's utility from an additional dollar increases more when he has $1,000 than when he has $10,000. From this, we can conclude that John

A) is risk averse. B) is risk loving. C) is risk neutral. D) has a negative marginal utility of wealth.

Figure 10.2 depicts a firm's marginal revenue product curve. If the wage rate is $15, how many workers will the firm demand?

A. four workers B. five workers C. six workers D. seven workers