Question
Suppose identical price-setting duopoly firms have constant marginal costs of $50 per unit and no fixed costs. Consumers view the firms' products as perfect substitutes.
Suppose identical price-setting duopoly firms have constant marginal costs of $50 per unit and no fixed costs. Consumers view the firms' products as perfect substitutes. The market demand is:
Q=120-p
In Bertrand equilibrium, what is each firm's price?
Firm 1 Price _____?
Firm 2 Price____?
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Econometric Analysis
Authors: William H. Greene
5th Edition
130661899, 978-0130661890
