Multiple Choice
According to the Bertrand paradox, if two firms produce a homogeneous product and have identical marginal cost, each firm:
A) Sets price equal to marginal cost.
B) Earns zero economic profit.
C) Charges the same price that is greater than marginal cost.
D) Charges a different price that is greater than marginal cost.
E) Answers a and b are correct.
Correct Answer:
Verified
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