Firm A has a higher marginal cost than firm B. They compete in a homogeneous product Bertrand duopoly. Which of the following results will NOT occur?

Name: Firm A has a higher marginal cost than firm B. They compete in a homogeneous product Bertrand duopoly. Which of the following results will NOT occur?
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Question

Quizplus · Accepted Answer

In a Bertrand duopoly with homogeneous products, firms set prices. The firm with the lower marginal cost (firm B) will set a lower price than firm A, so Price_A cannot be less than Price_B.

Firm a Has a Higher Marginal Cost Than Firm B