Question
Two firms offer a homogenous product. They have the same (constant) marginal costs and are engaging in Bertrand competition. One of the companies exits the
Two firms offer a homogenous product. They have the same (constant) marginal costs and are engaging in Bertrand competition. One of the companies exits the industry. After the exit, the price for the other firm increases by 25%. What is the elasticity of demand at the new market price?
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Intermediate Microeconomics
Authors: Hal R. Varian
9th edition
978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968
