Question
(b) Take first-order conditions for the two monopolists.(c) Simultaneously solve your first-order conditions to find the equilibrium quantities sold of the two types of car.(d)
(b) Take first-order conditions for the two monopolists.(c) Simultaneously solve your first-order conditions to find the equilibrium quantities sold of the two types of car.(d) What would ?0 and ?1 have to be set to, for the equilibrium quantitites to be Q0 = 60, Q1 = 60? Note that while this is a bit different conceptually from what you have done before, it is simpler mathematically. Instead of having to simultantaneously solve the two conditions, you should be able to solve them one-by-one. Remember to replace ?20 with ??0 in the expression for profits from type 0, and +20 with ??1 in the profits for type 1.
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