Consider an oligopolistic market with two identical firms producing homogeneous goods. Each firm has marginal costs of $50 per unit and the firms compete by simultaneously choosing prices. Assume fixed costs are negligible.

Firm 1 faces a direct demand function ofq1=3842p1+1p2.

Firm 2 faces a direct demand function of q2=3842p2+1p1.

What price will Firm 2 charge in theNash-Bertrand equilibrium?

A.

50.00

B.

105.67

C.

161.33

D.

372.67

E.