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hammer [34]
3 years ago
11

Two identical firms that share a market and produce a homogenous good will find the Bertrand Oligopoly LEAST attractive because

_____________
Business
1 answer:
inn [45]3 years ago
3 0

Answer:

The correct answer that fills the gap is: Cartels generate the highest joint profit, they want to avoid a price war that leads to profit erosion and P=MC, a cournot oligopoly will generate more profit than a bertrand oligopoly

Explanation:

In Bertrand's model, consumers will buy the goods of the company that offers the lowest price. From this it can be intuited that the Nash equilibrium will be the one in which both companies set the same price. For this reason it is not attractive, since they are competition and for some of the two it may not be profitable to decrease the sale price of their products.

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