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Which of the Following Predictions of the Bertrand Model Appear

Question 29

Multiple Choice

Which of the following predictions of the Bertrand model appear to be unrealistic in the real world:


A) Firms in imperfectly-competitive markets tend to charge prices that are greater than marginal cost.
B) As the number of firms enter the industry prices tend to fall.
C) Firms in imperfectly-competitive markets tend to earn zero economic profits.
D) All of the above are unrealistic.
E) None of the above are unrealistic.

Correct Answer:

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