Question
Consider two firms selling differentiated varieties of a product. Each firm j chooses a price pj for its own variety. The demand functions are D1(p1,
Consider two firms selling differentiated varieties of a product. Each firm j chooses a price pj for its own variety. The demand functions are D1(p1, p2) = 70 + p2 2p1 and D2(p1, p2) = 9 + p1 1 2 p2. The cost functions are C1(q1) = 5q1 and C2(q2) = 2q2. Find the unique Nash equilibrium of this game.
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Modeling Monetary Economies
Authors: Bruce Champ, Scott Freeman, Joseph Haslag
4th Edition
1316508671, 1316508676, 9781316723302 , 978-1107145221
