Asked by Nohely Ortiz on Jun 12, 2024
Verified
In Bertrand competition between two firms, each firm believes that if it changes its output, the rival firm will change its output by the same amount.
Bertrand Competition
A market model in which two or more firms compete by setting prices, with each firm considering the price set by competitors when determining its own price.
- Employ game theory principles to scrutinize the strategic actions of companies within competitive environments.
Verified Answer
JT
Jacqueline TorresJun 16, 2024
Final Answer :
False
Explanation :
In Bertrand competition, firms compete by setting prices, not quantities, and each firm assumes the rival's price is fixed when setting its own price.
Learning Objectives
- Employ game theory principles to scrutinize the strategic actions of companies within competitive environments.
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