Suppose that two firms are engaged in Bertrand competition with identical goods and each firm has a marginal cost of $33. In a Nash Equilibrium, the price is $____.

Question

Quizplus · Accepted Answer

In Bertrand competition with identical goods and identical costs, firms will set prices equal to marginal costs in Nash Equilibrium to avoid being undercut by competitors. Therefore, the price will be $33.

Suppose That Two Firms Are Engaged in Bertrand Competition with Identical