Solved

Let Firm a Face Demand Curve QA=100PA+.5PBQ _ { A } = 100 - P _ { A } + .5 P _ { B }

Question 47

Multiple Choice

Let firm A face demand curve QA=100PA+.5PBQ _ { A } = 100 - P _ { A } + .5 P _ { B } and firm B face demand curve QB=100Q _ { B } = 100 - PB+.5PAP _ { B } + .5 P _ { A } . Products A\mathrm { A } and B\mathrm { B } both have constant marginal cost of production of 10 per unit (and no fixed cost) . Each firm acts as a Bertrand competitor. What are the Bertrand Equilibrium prices in this market?


A) PB=72.5;PA=70P _ { B } = 72.5 ; P _ { A } = 70
B) PB=PA=73.33P _ { B } = P _ { A } = 73.33
C) PB=74;PA=87P _ { B } = 74 ; P _ { A } = 87
D) PB=PA=74P _ { B } = P _ { A } = 74

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions