Solve for the Nash-Bertrand equilibrium for the firms described in Question 5.5 if both firms have a
Question:
Solve for the Nash-Bertrand equilibrium for the firms described in Question 5.5 if both firms have a marginal cost of \(\$ 0\) per unit. \(\mathbf{A}\)
Data From Question 5.5:-
Suppose that identical duopoly firms have constant marginal costs of \(\$ 10\) per unit. Firm 1 faces a demand function of \(q_{1}=100-2 p_{1}+p_{2}\), where \(q_{1}\) is Firm 1's output, \(p_{1}\) is Firm 1's price, and \(p_{2}\) is Firm 2's price. Similarly, the demand Firm 2 faces is \(q_{2}=100-2 p_{2}+p_{1}\). Solve for the NashBertrand equilibrium. \(\mathbf{C}\)
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