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Which Assumptions of the Bertrand Model Be Altered to Avoid

Question 17

Multiple Choice

Which assumptions of the Bertrand model be altered to avoid the Bertrand Paradox (that an outcome resembling perfect competition may arise with even as few as two firms) ?


A) assuming firms have limited capacities.
B) assuming firms produce differentiated rather than homogeneous products.
C) assuming firms play repeatedly and thus may collude.
D) all of the above.

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