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1. For the following question, state True or False, and explain why.
a) Firms practicing perfect price discrimination charges a price equal MC.
b) In a Bertrand model of homogenous goods, each firm sets its price in response to the perceived pricing decision of other firms, thus in equilibrium, prices exceeds marginal cost. c) The more block prices a firm can set, the higher the producer surplus.
d) In two-part tariffs, consumers pay at a price equal to MC and earn some small amount of consumer surplus.
e) In oligopolistic competition, firms always produce differentiated products.
f) A Cournot equilibrium output would increase as the number of firms in the market decreases.
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