In a Bertrand model, market power is a function of A) marginal ...

[vicky]

In a Bertrand model, market power is a function of
 
  A) marginal cost.
  B) the number of firms.
  C) price elasticity of supply.
  D) product differentiation.

Question 2

Suppose n identical Cournot firms purchase labor in a competitive labor market. How is the market demand for labor affected by the number of firms in the market?
 
  What will be an ideal response?

[bobsmith]

Answer to Question 1

D

Answer to Question 2

Each firm chooses a quantity of labor demanded such that w = p(1 + 1/n) MPL. As n increases, the demand for labor curve from the individual firm shifts leftward. With the increase in the number of firms, however, market demand shifts rightward.