The market demand in a Bertrand duopoly is P = 10 ? 3Q, and the marginal costs are $1. Fixed costs are zero for both firms. Based on this information we can conclude that:
A. P = $7 and firm 1 will sell 7 units of output.
B. P = $1 and firms 1 and 2 will each sell 7 units of output.
C. P = $1.5 and firms 1 and 2 will each sell 10 units of output.
D. P = $1 and firms 1 and 2 will each sell 1.5 units of output.
Answer: D
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