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5. Assume that there are only two firms in the market for breeding and selling weasels and only two species of weasel (badgers and wolverines)
5. Assume that there are only two firms in the market for breeding and selling weasels and only two species of weasel (badgers and wolverines) are bred. Firm Badger breeds and sells only badgers; Firm Wolverine breeds and sells only wolverines. Assume that these firms are in competition for those consumers who desire badgers or weasels as pets, and assume that both firms compete strictly on price. Firm Badger faces demand of qB(PB) = 1000 - 20PB + 20Pw and total cost of TCB (qB) = 10qB. Firm Wolverine faces a symmetric demand of qw (Pw) = 1000 - 20Pw + 20Pp and has total costs of TCw (qw) = 10qw. a. Find each firm's Bertrand best response (reaction) function. b. Solve for the Bertrand Nash equilibrium. c. Find each firm's profit
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