In a Bertrand model with identical products: a) Price is the same as in a competitive market equilibrium

(a)

Bertrand Model is referred to as a model in economics that is used to explain the interaction between the producers that set the prices and the consumers that decide to purchase the quantity of good at that price. This model argues that if instead of choosing quantity a firm chooses prices, then the competitive result would be attained with the marginal cost being equated with the prices.

In a Bertrand model with identical products, the price is the same as in competitive market equilibrium because two firms undercut their prices to such an extent such that price falls down to the marginal cost. As a result, the profits of the firms will disappear.

This condition is similar to perfect competition in which the firms set prices equal to the marginal cost.

Explanation of the other options

Option (b) is incorrect.

In a Bertrand model with identical products price and quantity are not the same. Thus, the statement is wrong.

Option (c) is incorrect.

In a Bertrand model with identical products price and quantity are not the same as in a monopoly. Thus, the statement is wrong.

Option (d) is incorrect.

Since option (a) is correct, none of the above cannot be the right answer. Thus, the statement is wrong.