Consider three firms producing the same good in a market competing a la Bertrand. They face an inverse demand function Q(p) = 10 – P Which of the following is FALSE? For these problems assume no firm has a fixed cost. A If each firm's marginal cost is $5, the equilibrium price paid by consumers is 5. B If a firm leaves the market and their marginal cost is higher than the Nash Equilibrium Price, the Nash Equilibrium will not change.

Consider three firms producing the same good in a market competing a la Bertrand. They face an inverse demand function Q(p) = 10 – P Which of the following is FALSE? For these problems assume no firm has a fixed cost. A If each firm's marginal cost is $5, the equilibrium price paid by consumers is 5. B If a firm leaves the market and their marginal cost is higher than the Nash Equilibrium Price, the Nash Equilibrium will not change.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.3P

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