Suppose two Bertrand firms produce similar but not identical products. Their demand curves follow.
Firm A: q_A = 10 - 3P_A + P_B
Firm B: q_B = 10 - 3P_B + P_A
Assume that marginal cost is zero for both firms.

Question

Suppose two Bertrand firms produce similar but not identical products. Their demand curves follow. Firm A: q<sub>A</sub> = 10 - 3P<sub>A</sub> + P<sub>B</sub> Firm B: q<sub>B</sub> = 10 - 3P<sub>B</sub> + P<sub>A</sub> Assume that marginal cost is zero for both firms.

Quizplus · Accepted Answer

The Answer of Suppose two Bertrand firms produce similar but not identical products. Their demand curves follow. Firm A: q_A = 10 - 3P_A + P_B Firm B: q_B = 10 - 3P_B + P_A Assume that marginal cost is zero for both firms.

Suppose Two Bertrand Firms Produce Similar but Not Identical Products