Consider the Bertrand Game with homogeneous firms covered in lecture 2. Consider the game which is identical to that one except that now there arethreefirms. Recall that the marginal cost per unit produced is 10. Which of the following statements is correct?

(Hint: think twice before you answer.)

There is a unique Nash equilibrium and all three firms choose p = 10.

There is a unique Nash equilibrium and at least one firm chooses p > 10.

Nash equilibrium does not exist.

There are infinitely many Nash equilibria.