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(b) Firm 1 has a demand function given by 611 = 1 2p1 + p2, where p2 is the price charged by rm 2. The
(b) Firm 1 has a demand function given by 611 = 1 2p1 + p2, where p2 is the price charged by rm 2. The cost function of rm 1 is C(ql) = (q 1)2+ (11. Prot for rm 1 is given by Tt(p1, p2) = p1 q1(p1, p2) C(q1(p1, 192)). Use the product rule and the chain rule to determine the derivatives of rm 1 prot with respect to [91 and p2
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