The Nash Equilibrium in a Bertrand Game in Which Firms

Multiple Choice

The Nash equilibrium in a Bertrand game in which firms produce perfect substitutes and have equal marginal costs is:

A) efficient because all mutually beneficial transactions will occur.
B) efficient because of the free entry assumption.
C) inefficient because some mutually beneficial transactions will be foregone.
D) inefficient because of the uncertainties inherent in the game.