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Explain clearly 6_1_c) Consider two firms producing differentiated products. If firm 1 and 2 choose prices p1 and p2 respectively, the quantity that consumers demand

Explain clearly

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6_1_c) Consider two firms producing differentiated products. If firm 1 and 2 choose prices p1 and p2 respectively, the quantity that consumers demand from firm i is the following: Qi (pi, pj) = 100 - 2pi + pj We assume no fixed costs of production, constant marginal costs are equal to 20. Firms act simoultaneously. a) Find the Nash equilibrium of this game, use a graph to represent the reaction functions. b) How do you think the equilibrium computed in a) will change if cross-price elasticities of demand increase? How would you alter the equations to show such an increase

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