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Author Question: In a Bertrand model, market power is a function of A) marginal cost. B) the number of firms. C) ... (Read 115 times)

vicky

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on: Jul 1, 2018
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?
Microeconomics ¦ Perloff ¦ 8th Edition
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bobsmith

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Reply #1 on: Jul 1, 2018
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.


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