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Two bus companies must select how many busses per day they will send to make the trip from Eugene to Portland in one day. The

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Two bus companies must select how many busses per day they will send to make the trip from Eugene to Portland in one day. The inverse demand is sach that the price consumers are willing to pay is P(Q)=203Q, where Q=qA+qA is the total number of busses, qA is the number of busses sent by fim A, and qB is the number of busses by firm B. If each firm must choose between sending 1, 2 or 3 busses that day, and the cost of sending a bus that route is $4 (that is, C(q2)=4qi). then what is the equilibrium number of busses sent? Recall that each firm's profits wil be i(q2;qi)=P(q1+q2)qiC(q2) Note, for example, if each firm sends 1 bus, then Q=2 and the market price wil be P(2)=2032=14. This makes each firm's profit to be: II (1;1)=P(2)141=144=10 Alternatively, if firm A sends 2 busses and firm B sends 3 busses, then Q=2+3=5 and the market price will be P(S)=2035=5. Firm A's profits will be IIA(2;3)=5242=2 while firm B's profits will be n(3;2)=5343=3 You can make a bimatrix table with the information above and then find the Nash Equaibrium

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