Exercise 5bis: Collusion with asymmetric costs and Bertrand competition Two firms compete in a market for a homogeneous product. In this market there are N=1 consumers (the normalization N=1 eliminates one parameter); each consumer buys one unit if the price of the product does not exceed 10, and nothing otherwise. Consumers buy from the firm selling at the lowest price. Assume also that firm 1 has lower marginal costs: c1=0

Exercise 5bis: Collusion with asymmetric costs and Bertrand competition Two firms compete in a market for a homogeneous product. In this market there are N=1 consumers (the normalization N=1 eliminates one parameter); each consumer buys one unit if the price of the product does not exceed 10, and nothing otherwise. Consumers buy from the firm selling at the lowest price. Assume also that firm 1 has lower marginal costs: c1=0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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