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Consider an industry consisting of two firms producing an identical product.The inverse market demand equation is P = 2.5-Q/2.The total cost equations for firms 1

Consider an industry consisting of two firms producing an identical product.The inverse market demand equation is P = 2.5-Q/2.The total cost equations for firms 1 and 2 are TC₁= Q₁and TC₂= Q₂, respectively. Suppose that the two firms are Bertrand competitors.Firm 1 will earn a profit of:

1/4.

0.

1/2.

5/6.

3/4.

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