Equilibrium Analysis of Bertrand Competition Model

This paper offers a comprehensive examination of the major competition models in microeconomics, with a central emphasis on the Bertrand framework. In addition to Bertrand price competition, the paper also reviews different competition models to highlight how firms’ strategic choices shape market outcomes. The analysis contrasts price-based and quantity-based competition and evaluates their impacts on equilibrium prices, outputs, and welfare across monopoly, duopoly, and oligopoly structures. Special attention is paid to the characteristic result of the Bertrand model, in which homogeneous-goods price competition drives the market price toward marginal cost.