Consider the market for nonalcoholic beers from the previous question. Which of the following is the Bertrand reaction function for Cudweiser?
a. PC = 1 + .033PB
b. PC = 1 - .033PB
c. PC = 1.5 + .075PB
d. PB = 1.5 + .075PC
QUESTION 2Consider the market for nonalcoholic beers from the previous question. Which of the following is the best-response function for Boors from the Bertrand game?
a. PB = -2.5 + .05PC
b. PB = 2.5 + .05PC
c. PC = 2.5 - .05PB
d. PB = 2.5 - .15PC
QUESTION 3Suppose there are two firms, Boors and Cudweiser, each selling nonalcoholic beer. Suppose Boors and Cudweiser are not viewed as perfect substitutes but rather demand for Boors is QB = 5000 1000PB + 100PC and demand for Cudweiser is QC = 3000 1500PC + 100PB. For simplicity, assume zero marginal costs. Which is the more preferred beer?
a. Boor's
b. Cudweiser
c. they are equally preferred
d. neither are preferred
QUESTION 4Consider the same market for nonalcoholic beer as in the previous question. How many units will Boors produce in the Nash equilibrium?
a. 1,333
b. 2,333
c. 3,333
d. 4,333
QUESTION 5Consider the same market for nonalcoholic beer as in the previous question. How many units of beer will Cudweiser produce?
a. 667
b. 1,667
c. 2,333
d. 3,000
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