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Assume that four mineral water producers compete in prices in a Bertrand setting

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Question;Assume that four mineral water producers compete in prices in a Bertrand setting. The firms differ with respect to their costs. Firm A?s marginal cost per ton is 8 $, firm B?s is 7 $, firm C?s is 9 $, and firm D?s is 7.50 $.;a) Which firm will serve the market? What price (approximately) will it charge?b) Would your answer change if firms A and B had somewhat greater fixed costs of production than firms C and D? Justify your answer in less than 80 words.

 

Paper#57716 | Written in 18-Jul-2015

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