Define the Bertrand Model and Its Assumptions

question 42

Essay

Define the Bertrand model and its assumptions.Explain why the model predicts the perfectly competitive outcome despite the number of sellers.Discuss the limitations of the model.

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Definitions:

Total Revenue

The total amount of money a company receives from its business activities before any expenses are subtracted, calculated by multiplying the price per unit by the quantity sold.

Total Cost

The complete cost of production, including both fixed and variable costs.

Quantity Effect

Refers to the change in consumer behavior resulting from a change in the price of a product, where the quantity demanded increases as the price decreases and vice versa.

Total Revenue

The total amount of money received by a company for goods or services sold, before any expenses are subtracted.