The Nash equilibrium in a Bertrand game in which firms produce perfect substitutes and have equal marginal costs is:

Question

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In a Bertrand game with firms producing perfect substitutes and having equal marginal costs, the Nash equilibrium leads to a situation where prices are pushed down to marginal cost levels. This results in an efficient outcome where all mutually beneficial transactions occur, as firms cannot profitably undercut each other further without making losses.

The Nash Equilibrium in a Bertrand Game in Which Firms