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    Bertrand Competition

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    In most cities all lumber yards advertise that they have the lowest price in town. In addition, they often claim that they will match the prices of any other lumber yards. Is this Bertrand competition that brings about zero economic profits? Explain.

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    Bertrand competition is a model of price competition between duopoly firms which results in each charging the price that would be charged under perfect competition. If there are a number of lumber companies (more than 2), ...

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    The solution is detailed and explains the concepts very well. The solution is very easy to understand as well. All the steps are clearly shown which makes it very easy for anyone to follow. Overall, an excellent response to the question being asked.