13.30. Three firms compete as Bertrand price competitors in a differentiated products market. Each of the three
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13.30. Three firms compete as Bertrand price competitors in a differentiated products market. Each of the three firms has a marginal cost of 0. The demand curves of each firm are as follows:
where P23 is the average of the prices charged by Firms 2 and 3, P13 is the average of the prices charged by Firms 1 and 3, and P12 is the average of the prices charged by Firms 1 and 2 [e.g., P12 ! 0.5(P1 # P2)]. What is the Bertrand equilibrium price charged by each firm?
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