« previous next »

Author Question: Two firms engage in Bertrand competition in differentiated products. After doing all the appropriate ... (Read 90 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?

There are major differences in the metabolism of morphine and the illegal drug heroin. Morphine mostly produces its CNS effects through m-receptors, and at k- and d-receptors. Heroin has a slight affinity for opiate receptors. Most of its actions are due to metabolism to active metabolites (6-acetylmorphine, morphine, and morphine-6-glucuronide).

Did you know?

Immunoglobulin injections may give short-term protection against, or reduce severity of certain diseases. They help people who have an inherited problem making their own antibodies, or those who are having certain types of cancer treatments.

Did you know?

Chronic necrotizing aspergillosis has a slowly progressive process that, unlike invasive aspergillosis, does not spread to other organ systems or the blood vessels. It most often affects middle-aged and elderly individuals, spreading to surrounding tissue in the lungs. The disease often does not respond to conventionally successful treatments, and requires individualized therapies in order to keep it from becoming life-threatening.

Did you know?

Most strokes are caused when blood clots move to a blood vessel in the brain and block blood flow to that area. Thrombolytic therapy can be used to dissolve the clot quickly. If given within 3 hours of the first stroke symptoms, this therapy can help limit stroke damage and disability.

Did you know?

Thyroid conditions may make getting pregnant impossible.

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
Liquid Formulations of Herbal Products Liquid Formulations of Herbal Products
The two phases of glycolysis and the products of glycolysis The two phases of glycolysis and the products of glycolysis
Marginal Products of Physical and Human Capital Marginal Products of Physical and Human Capital
Gene products that are essential to mitochondrial function Gene products that are essential to mitochondrial function
Products of Protein Breakdown Products of Protein Breakdown
Video: Helper T cell receptors, activation, proliferation, differentiation & action

For a complete list of videos, visit our video library