Consider an industry consisting of two firms producing an identical product. The inverse

market demand equation is P = 100 2Q. The total cost equations for firms 1 and 2 are TC1 = 4Q1 and

TC2 = 4Q2, respectively.

Suppose that the two firms are Bertrand rivals. The equilibrium level

of output for firm 1 is:

a. 8.

b. 10.

c. 12.

d. 24.

e. None of the above.

Suppose that the two firms are Bertrand rivals. The equilibrium level

of output for firm 2 is:

a. 8.

b. 10.

c. 12.

d. 24.

e. None of the above.

Suppose that the two firms are Bertrand rivals. The market price is:

a. $4.

b. $6.

c. $8.

d. $10.

e. None of the above.

Suppose that the two firms are Bertrand rivals. Firm 1 will earn a

profit of:

a. $100.

b. $0.

c. $10.

d. $100.

e. Cannot be determined from the information provided.