Suppose two firms are competing in prices (Bertrand) in an industry where demand is p=200-4Q.
(a) If both firms have MC=120, what is the equilibrium quantity for each firm? Profits?
(b) Suppose one firm has MC=120 and one has MC=100. Approximately how much profit does each firm
make? (c) Suppose one firm has MC=150 and one has MC=0. Approximately how much profit does each firm
a. In Bertrand competition, equilibrium will be perfect competition price and quantity. P=MC 120=200-4Q Q=20... View the full answer
- Thank you. Some clarification on methodology would have been helpful.
- May 01, 2016 at 6:32pm