Symmetric duopoly and price competition. Case Study without Residuals
AbstractPrice competition is seldom mentioned in the economic literature. Models like Cournot duopoly and Stakleberg duopoly assumed that firms compete through quantity. Bertrand duopoly assumed that firms compete through price simultaneously. This paperwork assumes that firms compete through price sequentially. It made also different assumptions from Bertrand model like finite production capacity, fix costs, constant returns and competition on two markets (market for product and market for raw material).
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