Under Bertrand competition, firms compete over the price of the good produced. This lecture investigates what happens under a duopoly where firms have identical marginal costs. The only equilibrium pricing strategies require both firms to choose the price that exactly offsets the marginal cost of production. As a result, firms earn no profit in this model.
0:00 Introduction
0:26 Bertrand Model Setup
3:11 Equilibrium
5:54 Why No Other Equilibria Exist
