Suppose that in an industry there are 3 firms competing in prices. Their marginal cost is the same, constant, and equal to 100. The demand is given by = 1000 .

(a) What is the outcome of this game if the market exists just for one period?

(b) Suppose instead that these firms are on this market for the long run, and they play the Bertrand

game infinitely many times. At every period there is the same demand, and firms can reset their prices. Suppose that the interest rate is = 5%. Can cooperation be sustained?