Question

This quantity appears in both the numerator and the denominator in the usual definition of the Lerner index. Unlike in the Cournot (“core-NOH”) model, this quantity is explicitly chosen in the Bertrand model. The Slutsky equation takes the derivative with respect to this quantity of the Marshallian demand, giving terms corresponding to the income and substitution effects. Menu costs (20[1])primarily (20[1])contribute to this quantity’s (*) “stickiness.” (10[11])Firms in perfect (10[2])competition (10[2])are described as “takers” of this quantity. (10[3])Government-imposed (10[1])“floors” on this quantity can result in surpluses (10[2])if they are above this quantity’s equilibrium value. For 10 points, supply and demand curves plot quantity sold against what quantity measured in dollars? (10[4])■END■ (10[7])

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