In a Bertrand model with identical firms and a non-differentiated product,price will increase in response to

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In a Bertrand model, firms compete solely on price, and because the product is non-differentiated and identical across all firms, consumers will choose the firm with the lowest price. Thus, if one firm decreases its price, it will capture a larger market share, prompting other firms to lower their price as well in order to remain competitive. This process continues until price reaches marginal cost. Therefore, an increase in marginal cost will lead to an increase in price, as firms will need to charge more in order to cover their costs. In contrast, an increase or decrease in the number of firms will not affect the equilibrium price, as long as they all have the same costs.

In a Bertrand Model with Identical Firms and a Non-Differentiated