(GameTheory question)Two rms are price-competing as in the standard Bertrand model. Each faces the market demand

function D(p) = 1000 p. Firm 1 has constant marginal cost c1 = 200, while rm 2 has the constant

marginal cost c2 = 400. If one of the rms has the lower price, they capture the entire market, like

the standard model. However, when they charge exactly the same price, rm 2 gets 75 percent of the

demand, rm 1 gets the remaining quarter.

Q1. Write out the best-response correspondences B1(p2) and B2(p1) as functions of p2 and p1 respectively.

Q2. Is there an equilibrium for this game as defined?