Under standard Bertrand competition between identical firms in a single market where the firm with the lowest price takes the entire market (assume the price is non-negative real number), O Firms can make positive profits in equilibrium There is a unique equilibrium in which both firms charge the price equals to marginal cost O Firms make zero profit, but price may be above the marginal cost None of the other choices is correct
Under standard Bertrand competition between identical firms in a single market where the firm with the lowest price takes the entire market (assume the price is non-negative real number), O Firms can make positive profits in equilibrium There is a unique equilibrium in which both firms charge the price equals to marginal cost O Firms make zero profit, but price may be above the marginal cost None of the other choices is correct
Chapter15: Oligopoly And Strategic Behavior
Section: Chapter Questions
Problem 12P
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