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Hi! please, help me solve this. thanks! 3. Two phone service providers, Teleterica (T) and Colgafon (C), offer same quality internet access. The inverse demand
Hi! please, help me solve this. thanks!
3. Two phone service providers, Teleterica (T) and Colgafon (C), offer same quality internet access. The inverse demand is p = 140 2Q, where Q is the number of subscriptions and p the price charged to each customer. qT and qC are the number of customers served by Teleterica and Colgafon, respectively, where Q = qT + qC . Marginal costs are constant, cT = cC = 20. Suppose firms simultaneously compete in prices, pT , pC .
a) Determine the best response function for each firm.
b) Find equilibrium prices.
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