Question

13. In a Bertrand oligopoly a) each firm chooses simultaneously and non-cooperatively how much to b) each firm chooses simultaneously and non-cooperatively its own product's c) one firm acts as a quantity leader, choosing its quantity first, while all other d) each firm makes its profit-maximizing decision while considering the entire produce to maximize its own profit. price to maximize its own profit. firms act as followers, choosing their quantities second and in reaction to the leader. market demand, the same as a monopolist. 14. Bertrand duopolists, Firm 1 and Firm 2, face inverse market demand 50-0 and both have marginal cost, MC $20. The equilibrium output this market will be a) 15 b) 20 c) 30 d) 40

Answer 1

13) ans is B

bedtrand competition is the price competition where firms simultaneously takes decision regarding price in order to maximise profit

14) In Bertrand competition, P=MC=20

Thus Price=20 and Qd=50-20=30

ans is C