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(Bertrand game with discrete prices and asymmetric costs) Consider two rms producing a homogeneous product. Let ql and (12 be the quantities produced by rm

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(Bertrand game with discrete prices and asymmetric costs) Consider two rms producing a homogeneous product. Let ql and (12 be the quantities produced by rm 1 and rm 2, respectively. Demand is given by Q = g p, where Q = q1 + (:2. The total cost functions of rm 1 and rm 2 are given by C (q1) = (11 and C ((12) = 2:39, respectively. Suppose that competition is Bertrand and that each rm has to choose its price level from a discrete set with equal intervals, 9" = {0, 0.1, 0.2, ..., 9.8, 9.9, 10}; that is, for instance, choosing p1 = 4.3 is allowed but choosing p1 = 0.17 is not allowed. If both rm set the same price, demand is equally split between them. (3.) Find a pure-strategy Bertrand Nash equilibrium. Justify your answer. (b) Is this the only pure-strategy Bertrand-Nash Equilibrium of the game? (0) Suppose now that instead of having cost C ((12) = 2992, rm 2's cost function is C ((12) = 3912 / 2. \"That would you expect the Nash Equilibrum of the game to be

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