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Maximize profits: 1 = (P - 20)Q1 Subject to: Q1 + Q2 = Qd = 150 - 3Q1 Solving for Q1, we get: Q1 =

Maximize profits: 1 = (P - 20)Q1 Subject to: Q1 + Q2 = Qd = 150 - 3Q1

Solving for Q1, we get: Q1 = (150 - Q2 - 60)/4 The reaction function for Company 1 is: Q1 = 37.5 - Q2/4

Just one question, where did the 4 come from?

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