In Bertrand Competition with Differentiated Products and Zero Marginal Costs

question 161

Multiple Choice

In Bertrand competition with differentiated products and zero marginal costs, Firm A faces the demand curve q_A = 80 - 2P_A + 0.50P_B.If Firm A expects Firm B to charge a price of $20, what price should Firm A charge?

• A) $14.25
• B) $18.00
• C) $22.50
• D) $24.75

---

Definitions:

Flattery

The act of giving excessive compliments, often insincerely, to gain favor or advantage from someone.

Grant Proposal

A formal request or plan submitted to an organization or government body requesting funding for a project or initiative, detailing objectives, methodology, and budget.

Legislative Proposal

A recommendation for new laws or amendments to existing laws, formally introduced for consideration by a legislative body.

Agency Goals

The objectives or targets that an agency aims to achieve through its operations and initiatives.