Duopolists who compete on the basis of price will:
A) end up with price equal to marginal cost.
B) charge a price greater than marginal cost.
C) charge a price less than marginal cost.
D) price discriminate.
E) charge a price equal to marginal revenue.

Question

Quizplus · Accepted Answer

In a duopoly where firms compete on price, they tend to undercut each other until the price equals marginal cost, similar to the Bertrand model of competition.

Duopolists Who Compete on the Basis of Price Will