Consider the market for nonalcoholic beers from the previous question.Which of the following is the Bertrand reaction function for Cudweiser?
A)PC = 1 + .033PB
B)PC = 1 - .033PB
C)PC = 1.5 + .075PB
D)PB = 1.5 + .075PC

Question

Quizplus · Accepted Answer

The Bertrand reaction function for Cudweiser, given as PC = 1 + .033PB, indicates how Cudweiser would adjust its price (PC) in response to the price set by Budwiper (PB), following the Bertrand competition model where firms choose prices rather than quantities.

Consider the Market for Nonalcoholic Beers from the Previous Question