Suppose that firms A, B, C and D are Bertrand duopolists in the salt industry. The...
Suppose that firms A, B, C and D are Bertrand duopolists in the salt industry. The market demand curve can be specified as Q=100-3p, Q=qA+qB+qC+qD.
(The firms choose prices simultaneously.)
The cost to firm A is C(qA)=7qA.
The cost to firm B is C(qB)=3qB.
The cost to firm C is C(qC)=7qC
The cost to firm C is C(qD)=3qD
Homework Answers
Clarification: --
As Firms A, B, C, and D are Bertrand duopolists and in Bertrand competition, firms produce where P = MC as all the three firms A, C and D have irrelevant cost = $7 while Firm B's MC = $3
- So simply Firm B will convey the whole sum while the different firms don't make anything.
By the Firm B will pick a worth which is just not actually the Marginal cost of the different firms. Acknowledge it pick an expense of $6.(it could pick $6.9 anyway here I am taking $6 to make it whole number)
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