The strategy for the Bertrand model is
A)To sell a marginally higher quantity of goods than the rival
B)To sell at a marginally lower price than the rival but not below marginal cost
C)Collusion
D)To take account of the effect of its own behavior on the rival firm's quantity choice

Question

Quizplus · Accepted Answer

In the Bertrand model, firms compete by setting prices rather than quantities. The strategy is to undercut the rival's price slightly, but not below marginal cost, to capture the entire market.

The Strategy for the Bertrand Model Is