Suppose that Kent Property Management (K) and Prince Commercial Management (P) are competing for the management contracts to manage the buildings built by Stark and Rogers. Because they have the ability to manage all the commercial space, they are playing a Bertrand pricing game. Customers view each of the management companies as interchangeable: a square foot of real estate is the same, regardless of which company manages it (they are homogenous services).

Assume the following information applies:

• Demand: P = 24 2Q, or Q = 12 - 1/2P
• K's marginal costs: MC_K = 6 (TC_K = 6Q_K)
• P's marginal costs: MC_P = 4 (TC_P = 4Q_P)