« previous next »

Author Question: Two firms engage in Bertrand competition in differentiated products. After doing all the appropriate ... (Read 44 times)

cmoore54

  • Hero Member
  • *****
  • Posts: 568
on: Jul 1, 2018
Two firms engage in Bertrand competition in differentiated products. After doing all the appropriate calculations, you find the best-response functions are PB = 2.5 + .15PC and PC = 1.5 + .075PB. Without doing any further calculations, can you determine the relationship between their Nash equilibrium prices?
 a. Yes, PB > PC
  b. Yes, PC > PB
  c. Yes, PB = PC
  d. No; it cannot be determined.

Question 2

Consider the market for nonalcoholic beers from the previous question. Cudweisers' price in a Nash equilibrium (assuming Bertrand competition in these differentiated beers) is about
 a. 0.99
  b. 1.09
  c. 1.71
  d. 2.55


scikid

  • Sr. Member
  • ****
  • Posts: 300
Reply #1 on: Jul 1, 2018
Answer to Question 1

a

Answer to Question 2

b


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Russia has the highest death rate from cardiovascular disease followed by the Ukraine, Romania, Hungary, and Poland.

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

Did you know?

Prostaglandins were first isolated from human semen in Sweden in the 1930s. They were so named because the researcher thought that they came from the prostate gland. In fact, prostaglandins exist and are synthesized in almost every cell of the body.

Did you know?

In most cases, kidneys can recover from almost complete loss of function, such as in acute kidney (renal) failure.

Alexander Fleming photographed in his lab where he observed the natural competition between a fungus Alexander Fleming photographed in his lab where he observed the natural competition between a fungus
Sexual swellings are one way for females to advertise their mating availability, thereby inducing ma Sexual swellings are one way for females to advertise their mating availability, thereby inducing ma
Examples of Generic Drugs Contained in Brand-Name Products Examples of Generic Drugs Contained in Brand-Name Products
Indications for Blood Products Indications for Blood Products
Consumption of animal products "استهلاك المنتجات الحيوانية" Consumption of animal products "استهلاك المنتجات الحيوانية"
Some of the Various E. coli Genes and Their Products or Role in Replication Some of the Various E. coli Genes and Their Products or Role in Replication
Video: Interview with Person who has Panic Attacks

For a complete list of videos, visit our video library