Which factor would facilitate tacit collusion among firms in a market?

Which factor would facilitate tacit collusion among firms in a market?
 a. an increase in the number of firms.
  b. a decrease in the probability the market will continue into future periods.
  c. a decrease in the interest rate.
  d. none of these.

QUESTION 2

Which alteration of the assumptions behind the Bertrand model can help avoid the Bertrand Paradox (that an outcome resembling perfect competition may arise with even as few as two firms)?
 a. assume firms have limited capacities.
  b. assume firms produce differentiated rather than homogeneous products.
  c. assume firms play repeatedly and thus may collude.
  d. all of the above.

QUESTION 3

Which game does the Cournot model most resemble and why?
 a. the Battle of the Sexes because firms need to coordinate their outputs.
  b. the Battle of the Sexes because firms disagree on which outcome is best.
  c. the Prisoners Dilemma because firms don't maximize joint payoffs in equilibrium.
  d. the Prisoners Dilemma because firms play dominant strategies.

QUESTION 4

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?
 a. Yes, PB > PC
  b. Yes, PC > PB
  c. Yes, PB = PC
  d. No; it cannot be determined.

QUESTION 5

Consider the market for nonalcoholic beers from the previous question. Cudweisers' price in a Nash equilibrium (assuming Bertrand competition in these differentiated beers) is about
 a. 0.99
  b. 1.09
  c. 1.71
  d. 2.55

QUESTION 6

Consider the market for nonalcoholic beers from the previous question. Boors' price in a Nash equilibrium (assuming Bertrand competition in these differentiated beers) is about
 a. 1.71
  b. 2.55
  c. 3.55
  d. 4.29