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Firm A is competing in prices with firm B, which sells a somewhat different product. Firm A can invest to reduce its costs. Demonstrate with

Firm A is competing in prices with firm B, which sells a somewhat different product. Firm A can invest to reduce its costs. Demonstrate with a simple graph how Firm A will underinvest/overinvest [choose one] in cost reduction, compared to the situation in which there would be no strategic effect on firm B's pricing.

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