A new firm enters a market which is initially serviced by a Bertand duopoly charging a price of $20

Marketing Jan 14, 2021

A new firm enters a market which is initially serviced by a Bertand duopoly charging a price of $20. What will the new market price be should the three firms co-exist after the entry?

A) $25

B) $20

C) $15

D) none of the statements associated with this question are correct.

Expert Solution

The answer is: D) none of the statements associated with this question are correct.

The only thing we know for sure is that the new price will likely be something less than $20, but it's impossible to know by how much given the information provided.

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