What is the best response of firm B, given firm A is charging a low price?
a. Charge a low price
b. Charge a high price
c. Charge zero, give the good away
d. All of the above
QUESTION 2Amber's Ambrosia's share of the delicacy market is 10 If the own price elasticity of the aggregate fast food industry is 0.8, what is the own price elasticity of Amber's fast food?
a. 5
b. 6
c. 7
d. 8
QUESTION 3What is the best response of firm A, given firm B is charging a High Price?
a. Charge a low price
b. Charge a high price
c. Charge zero, give the good away
d. All of the above
QUESTION 4Puma's share of the athletic shoe market is 30 The own price elasticity of demand for Puma athletic shoes is 2.5 . What would be the own price elasticity of athletic shoes as a whole?
a. 8.3
b. 0.75
c. 0.54
d. 1.5
QUESTION 5If the game continues for infinity, then the new Nash Equilibrium is
a. for one firm to charge a HP forever.
b. for your firm charge a LP when the other firm does.
c. for each firm to charge HP so long as the rival does, otherwise charge a LP.
d. for each firm to charge LP until the rival does, and then to charge a HP forever.
QUESTION 6The manager of a gas station noticed that when prices in the convenience store of the gas station decreased, gas sales increased. This could possibly be because the convenience store products are
a. usually complements to the gas sales
b. usually substitutes to the gas sales
c. usually unrelated to the gas sales
d. none of the above
QUESTION 7What is the Nash equilibrium of the game?
a. Each firm charges a LP
b. Each firm charges a HP
c. You charge a LP and your rival charges a HP
d. None of the above.
QUESTION 8Gas stations can price the products that they sell in their convenience store a little bit higher because
a. these products are usually complements to the gas sales and the demand for gas is inelastic
b. these products are usually complements to the gas sales and the demand for gas is elastic
c. these products are usually substitutes to the gas sales and the demand for gas is inelastic
d. these products are usually substitutes to the gas sales and the demand for gas is elastic
QUESTION 9The equilibrium of this game indicates
a. Self-interest can sometimes lead to sub-optimal outcomes
b. Rationality can sometimes lead to inefficient outcomes
c. All of the above
d. None of the above
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