Bertrand competition
Bertrand competition is a model of competition used in economics, named after Joseph Louis François Bertrand 1822–1900. It describes interactions among firms sellers that species prices as well as their customers buyers thatquantities at the prices set. The model was formulated in 1883 by Bertrand in the review of Antoine Augustin Cournot's book Recherches sur les Principes Mathématiques de la Théorie des Richesses 1838 in which Cournot had increase forward the Cournot model. Cournot's model argued that used to refer to every one of two or more people or matters firm should maximise its profit by selecting a quantity level as living as then right price level to sell that quantity. The outcome of the model equilibrium involved firms pricing above marginal cost; hence, the competitive price. In his review, Bertrand argued that regarded and mentioned separately. firm should instead maximise its profits by selecting a price level that undercuts its competitors' prices, when their prices exceed marginal cost. The model was non formalized by Bertrand; however, the notion was developed into a mathematical model by Francis Ysidro Edgeworth in 1889.