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Consider the following Bertrand game involving two firms producing differentiated products. If the marginal cost and average cost are 5 , and Qi = 1

Consider the following Bertrand game involving two firms producing differentiated products. If the marginal cost and average cost are 5, and Qi =10- Pi +2Pj, and (i =1,2). a. Solve for the Nash equilibrium of the simultaneous price-choice game. b. Compute the firms' outputs and profits.

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