« previous next »

Author Question: Two firms engage in Bertrand competition in differentiated products. After doing all the appropriate ... (Read 95 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?

The Babylonians wrote numbers in a system that used 60 as the base value rather than the number 10. They did not have a symbol for "zero."

Did you know?

Malaria was not eliminated in the United States until 1951. The term eliminated means that no new cases arise in a country for 3 years.

Did you know?

A headache when you wake up in the morning is indicative of sinusitis. Other symptoms of sinusitis can include fever, weakness, tiredness, a cough that may be more severe at night, and a runny nose or nasal congestion.

Did you know?

A strange skin disease referred to as Morgellons has occurred in the southern United States and in California. Symptoms include slowly healing sores, joint pain, persistent fatigue, and a sensation of things crawling through the skin. Another symptom is strange-looking, threadlike extrusions coming out of the skin.

Did you know?

Nitroglycerin is used to alleviate various heart-related conditions, and it is also the chief component of dynamite (but mixed in a solid clay base to stabilize it).

Human embryonic stem cells differentiated to neural cells Human embryonic stem cells differentiated to neural cells
Standardization of Selected Herbal Products Standardization of Selected Herbal Products
Natural Products Natural Products
Common Fluoride Products Common Fluoride Products
Forest products and the economic value Forest products and the economic value
Marginal Products of Physical and Human Capital Marginal Products of Physical and Human Capital
Video: Leukemia

For a complete list of videos, visit our video library