1. Discount factors are most relevant in:

a.none of the other answers are relevant

b.finitely repeated contexts

c.infinitely repeated contexts

d.single-period contexts

2. Predatory behaviour does NOT include:

a.a leader choosing a quantity which equals the profit maximising level for a monopolist in the short term, and where the follower produces only half this amount

b.a leader choosing a quantity above the profit maximising level for a monopolist

c. monopolist setting a price below the profit maximising level to deter entry

d.a firm setting a price below the marginal cost to drive out existing competitors

3.In a duopoly, if the strategic choice variable increases for firm 1, what will happen to the strategic choice variable for firm 2?

a.increase for Bertrand models but decrease for Cournot models

b.increase for Bertrand models and for Cournot models

c.decrease for Bertrand models and for Cournot models

d.decrease for Bertrand models but increase for Cournot models

4. The incumbent in a Dixit model:

a.has no advantage because both firms are identical

b.has no advantage because there is a second-mover advantage

c.has an advantage from lower marginal cost

d.has an advantage from lower total cost