HELP PLEASE 2A, 2B, 2C

2) salop-bertrand

3 FIRMS

Firm's Demand Functions are:

q1 = P2 + P3 - P1 + a

q2 = P1 + P3 - P2 + a

q3 = P1 + P2 - P3 + a

ZERO COST AGAIN

2a) Why does the Firm's Demand Function have a MINUS ( - ) in front of its own PRICE but PLUS ( + ) in front of the other Firms' PRICE?

2b) Profit for each FIRM is just TOTAL REVENUE

i = pi qi

Plug in for q1 in 1 and MAXIMIZE WRT. P1

2c) Use SYMMETRY, so P1 = P2 = P3 to SOLVE for P1, q1 and 1

d) vSE SYMTETRY q1=q2 To save for q AND Q. PWG INTO P TO GET HARKET Prict. PLUGINTO DKOFT FUNCTOONS TO GEF P.CoflTS 2. SALOP-BTRTROND 3 FIRMS EARA FIRM'S DGMAND FUNCTIUNS RRF q1=21p2+21p3p1+aq2=21p1+21p3p2+aq3=21p1+21p2p3+a zERO COS AG.IN a) WHY dOES THE FIMT'S DEMOND FUNCTLON HVVE A MINSS ) IN FRONT OF ITS ONN PRICE BUT PLUS (*) IN FLONT OF OTHHRR FIRMS' Pricts? =qx