There are two firms in the oligopolistic market for running shoes. The two firms are competing on the basis of Bertrand competition. Which of the following statements is true.

Question 15 options:

Prices will be higher than under perfect competition.

Prices will be equal to marginal cost and thus the same as than under perfect competition.

The outcome with regards to prices would be the same if the two firms competed according to Cournot competition.

None of the above.

Question 16 (1 point)

Your friend is thinking about opening a shop that sells ice cream. It would cost him $20000 per year to rent the location on 9th street. Suppose your friend thought he could sell 10000 scoops of ice cream per year for around $5 each, which would cost him on average $2.50 each to produce. He also calculates that he would give a discount of 25 cents per scoop to students. What would be the average fixed cost per scoop of ice cream for your friend's first year of business?

Question 16 options:

$2

$2.25

$2.50

$3