Suppose that in the repeated Bertrand model discussed in Section 19.5, each period is a month, the

Question:

Suppose that in the repeated Bertrand model discussed in Section 19.5, each period is a month, the monthly demand function is Qd = 1,000 - 10P, and the marginal cost is $50. At what monthly interest rates can the firms sustain the monopoly price by charging the monopoly price if no one has yet undercut it, and charging $50 if someone has undercut it?