Question
Firm 1 and Firm 2 are Bertrand duopolists. Firm 1 has MC=1 and Firm 2 has MC=2.01. The demand for their product is p =
Firm 1 and Firm 2 are Bertrand duopolists. Firm 1 has MC=1 and Firm 2 has MC=2.01. The demand for their product is p = 7 - Q, where Q is total quantity demanded. Assuming that prices can only be set to the nearest penny ($0.01), what is profit for the firm who earns the highest profit?
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Economics
Authors: Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn
18th edition
978-0077413798, 0-07-336880-6, 77413792, 978-0-07-33688, 978-0073375694
