Bertrand model-but where the firms have different costs

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Consider a Bertrand model, but where the firms have different costs. Specifically, suppose that firm 1 has a marginal cost of $0.90 per unit and firm 2 has a marginal cost of $1.00 per unit. Prices must be named in increments of $0.01.

A. Is it an equilibrium for both firms to charge $0.90?

B. Is it an equilibrium for both firms to charge $1.00?

C. Is it an equilibrium for firm 1 to charge $0.99 and for firm 2 to charge $1.00?

D. Is it an equilibrium for firm 1 to charge $0.95 and for firm 2 to charge $0.96?

Reference no: EM131006526

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