An industry faces the demand curve Q = 400 - 4P, where each firm produces an identical good at a constant marginal cost of $10. The Bertrand equilibrium price is $____ for each firm.

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Quizplus · Accepted Answer

In a Bertrand competition, firms compete on price, and the equilibrium occurs where price equals marginal cost, assuming products are identical and there are no capacity constraints. Here, the marginal cost is given as $10, so the Bertrand equilibrium price is also $10.

An Industry Faces the Demand Curve Q = 400 -