Which of the Following Is True About a Differentiated-Product Bertrand

question 57

Multiple Choice

Which of the following is true about a differentiated-product Bertrand duopoly?

• A)Firm 1 and firm 2's prices will exceed marginal cost.
• B)Firm 1 and firm 2's prices will equal marginal cost.
• C)Firm 1's price will always be above marginal cost, while firm 2's price will be greater than marginal cost.
• D)Firms in a differentiated-product Bertrand duopoly cannot earn positive economic profits in the long run.

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