Bertrand Competition: Differentiated Products and Constant Marginal Costs

[@AkilBoii]

why did you use a different method in this video to your previous video on bertrand? and the profit function, are you not able to just do TR-TC? or just do the normal way of solving for MR=MC?

[@Skey1337]

Why cant you set MR = MC for both firms?

[@sihirliparmaklar6786]

Thank you sir you have saved my life !

[@catherineannvergel-delacue1461]

This video is very helpful. Thank you

[@vinitkumarkshatri6676]

why is the method different in this than the other video? could you plz explain. I am confused.

[@jiayichen9785]

Thank you it's quite helpful. Can I ask are the calculated prices the Nash equilibrium?

[@EconomicsinManyLessons]

Yes, the calculated prices give us a Nash eq.. Neither firm would want to change its price given the price being charged by the other firm.

[@jiayichen9785]

@@EconomicsinManyLessons Thank you.

[@Dada-jx7gr]

how did you get the 0.953 😢

[@nketiajoseph880]

Please can you explain this to me Why did you ignore 4p2 when taking the partial derivative of firm 1.

[@EconomicsinManyLessons]

When we take a partial derivative with respect to one variable, we treat the other variable as a constant--and the derivative of a constant is just zero. In this case, we treat 4P^2 as a constant when taking the partial derivative of the function with respect to P1. This video might be helpful: kzbin.info/www/bejne/gJ3clY2ppLB9lbM

[@Lucas-tg2sp]

@@EconomicsinManyLessons why did you keep the other p2 then

[@matthewjhall3027]

would this be the working out for when they collude and act as a monopoly or when they don't collude and act separately?

[@EconomicsinManyLessons]

There is no collusion or acting like a monopoly in Bertrand competition.

[@nikhilagrawal2064]

great video

[@jusufusillah8064]

Thank you so much

[@anthonystpeter2010]

So firm 2s Price is cheaper, therefore, wouldn't firm 1 go out of business? I thought the whole concept of Bertrand competition was that they both have to have the same price of MC or else one firm can just undercut the other and get the whole market?

[@EconomicsinManyLessons]

What you wrote is correct if the firms produce identical products. In this video, the model assumes firms are producing slightly different products giving them some market power.

[@oiconigawo3242]

No, because these are differentiated goods, not homogenous. Which means they're not perfectly elastic and consumers see them as more inelastic in comparison to the standard Bertrand.

[@berenger9077]

thank you Sir