A Bertrand model of oligopoly is one in which competing firms:
A)collusively choose price in order to maximize individual profits.
B)take a rival's output as given and subsequently choose a price that maximizes individual profits.
C)independently choose quantity in order to maximize individual profits.
D)independently choose prices in order to maximize individual profits.

Question

Quizplus · Accepted Answer

In a Bertrand model of oligopoly, firms independently choose their prices in an attempt to maximize individual profits, under the assumption that their competitors' prices are given. This contrasts with the Cournot model, where firms choose quantities.

A Bertrand Model of Oligopoly Is One in Which Competing