Relative to the Nash equilibrium in the Cournot model, the Nash equilibrium in the Bertrand model with homogeneous products
A) results in the same output but a higher price.
B) results in the same output but a lower price.
C) results in a larger output at a lower price.
D) results in a smaller output at a higher price.
E) any of the above may result.

Question

Quizplus · Accepted Answer

In the Bertrand model with homogeneous products, firms compete on price, leading to a price equal to marginal cost, resulting in a larger output and lower price compared to the Cournot model, where firms compete on quantity.

Relative to the Nash Equilibrium in the Cournot Model, the Nash