Question 6 Two firms compete in a Bertrand-Hotelling fashion in the sale of Soma. 1000 customers are uniformly distributed on the line between 0 and 1. Firm 1 is at the left endpoint, i.e. at 0 and Page 4 the firm 2 at the right endpoint, i.e. at 1. Travel costs for consumes are $1 a unit per mile. If firm i produces q; units it incurs a production cost of 0.5q?. There is a new technology that will change the production costs of each firm to a constant marginal cost of $1 a unit. If both firms adopt this technology will they each be better off