Q.8 Two competing firms make identical water purifiers. In addition, each firm can sell service contracts that goes along with water purifier sold. The cost of producing a water purifier is 60, and each service contract sold costs the firm 20. The market consists of 100 buyers. Each of the buyers have a reservation price of 400 for a water purifier. The reservation price for the service contract of half of the buyers is 10 and the other half of the buyers is 95. Prices are posted simultaneously by the firms. Each buyer is interested in buying at most one water purifier and at most one water contract. Suppose each of the firms sells water purifiers and service contracts as a bundle only. Buyers can choose to buy the entire bundle or not. Prices charged by each firm in equilibrium equals