If the Firms in a Duopoly Are Incapable of Satisfying

Multiple Choice

If the firms in a duopoly are incapable of satisfying total market demand at any price, the Bertrand model predicts that:

A) Both firms will engage in marginal cost pricing.
B) Both firms will set output levels simultaneously.
C) Both firms will earn positive economic profits.
D) Both firms will charge the same price.
E) Answers c and d are correct.