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A market consists of two companies producing heterogeneous products and participating in Bertrand competition. Demand and cost functions for company 1 are ? q 1
A market consists of two companies producing heterogeneous products and participating in Bertrand competition. Demand and cost functions for company 1 are
?q1?(p1?,p2?)=2??p1?+p2?? and ?C1?(q1?)=q12??
where ? > 0, while demand and cost functions for company 2 are given by
?q2?(p1?,p2?)=2?2p2?+p1?? and ?C2?(q2?)=q22??
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How can I inferred FOC for each company and show in detail that the best response functions are provided by
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