Suppose that two firms are engaged in Bertrand competition with identical goods and each firm has a marginal cost of $33. Suppose Firm A charges a price of $50 and Firm B charges $40. In this case, the market share for Firm A is ____%.

Question

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In Bertrand competition with identical goods, consumers will choose the firm that offers the lower price. Since Firm B charges $40 compared to Firm A's $50, all consumers will buy from Firm B, leaving Firm A with a market share of 0%.

Suppose That Two Firms Are Engaged in Bertrand Competition with Identical