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 charge a price that is greater than marginal cost.
B) Both firms will set output levels simultaneously.
C) Both firms will earn zero economic profits.
D) Both firms will charge the different price.
E) Answers a and d are correct.