We could make one more adjustment in the Bertrand model of this section and see what effect it has on the model.

We could make one more adjustment in the Bertrand model of this section and see what effect it has on the model.

What if we put a limit on the total quantity that a firm can produce? This limits the supply and possibly will put a floor on prices. Let K ≥
2 denote the maximum quantity of gadgets that each firm can produce and recall that D( p) =
− p is the quantity of gadgets demanded at price p. Find the profit functions for each firm.
We could make one more adjustment in the Bertrand model of this section and see what effect it has on the model.