How would this results be affected if consumers were

Question

The Bertrand Paradox relies on the assumption that the demand for any one firm's product is very responsive to pricing by the other firm.

Why is this assumption crucial for the competitive results in the Bertrand Model?

How would this results be affected if consumers were reluctant to shift purchases from one firm to another because of consumer switching costs?

What other assumptions are crucial for the Bertrand Paradox?

Answer 1

Prepare a task that would include to all aspect questions as for supposition crucial for the competitive consequences The Bertrand Paradox relies on the supposition that the demand for any one firm's product is very responsive to pricing via the other firm. Why is this supposition crucial for the competitive consequences in the Bertrand Model? How would this effect be affected if consumers were reluctant to shift purchases from one firm to another as of consumer switching costs? What other assumptions are vital for the Bertrand Paradox?