<p>In this paper, Bertrand’s price model for substitute products for deteriorating items and incorporating tax on purchasing and sales are considered in third order equation and advertisement-Bertrand’s price as a demand function with optimal pricing and lot size are decision variables. Two models are developed: mode-1 is considered Bertrand’s price model with Advertisement-Bertrand’s price as a demand function and incorporating purchasing and sales tax, and in the model-2, developed Bertrand’s price model without incorporating tax on purchasing and sales. Price break even point is established, and law of demand has been confirmed and highest possible profit has been calculated from the three alternative variables. Transporation cost, carbon emission cost, green technology invesment cost, are introduced to reduce carbon emissions. The price break even point is 3232.6176 and at this point no profit and no loss for the busines. The highest possible profit is 172,127.90 (money value) for the price of 3920.6083 (money value). A comparative study has been executed between incorporating tax along with without tax. It is evident that a gradual increase in tax rate, from 1 to 10 percent, significantly impacts and reduces the total profit. The profit for the period of incorporating the tax is 172,127.90 and profit for the period of without incorporating tax is 272,500.47. The profit during without incorporating period is more. Finding the optimum demand, optimal pricing along lot size for maximizing overall profit is purpose of this paper. Numerical examples demonstrate this model's applicability. To evaluate stability of this suggested model, a sensitivity analysis of the optimum solutions is provided. The data are generated by using Visual Basic 6.0</p>