Bertrand argued that price would be driven down to marginal cost even with only two firms in the market. Chamberlin, by introducing product differentiation, argued that price will exceed marginal cost even when there are many firms. Thus product differentiation resolves the "Bertrand Paradox"....

In this paper, it is proved that in the case of pure exchange economy, the oligopoly equilibrium leads to the competitive equilibrium when the economy is replicated an infinite number of times.