Economics

Bertrand Competition

Bertrand Competition

Bertrand competition is a model of competition found in economics, named after Joseph Louis François Bertrand (1822–1900). It describes relationship among firms (sellers) of which set prices along with their customers (buyers) of who choose quantities with the prices set. In his evaluation Bertrand argued that when firms chose prices rather than quantities, then the competitive outcome would take place with price equal to marginal cost.