3. Consider two firms producing differentiated products and competing on price choice. Theirdemand functions are given below9, = 40 – 2p, + P29, 3 40— 2р, + р,Their total costs are given as;TC, = 10q,TC, = 10q, b) Suppose firm 1 moves first in choosing price, find the equilibrium price, quantity andprofit for each firm

Demand Function is Given asq1 = 40 - 2p1 + p2q2 = 40 - 2p2 + p1Total Cost is Given asTC1 = 10q1TC2 =…

3. Consider two firms producing differentiated products and competing on price choice. Their demand functions are given below 9, = 40 – 2 p, + P2 q2 = 40 – 2 pz + P, Their total costs are given as; TC, = 10g, TC, =10q; %3D

3. Consider two firms producing differentiated products and competing on price choice. Their demand functions are given below 9, = 40 – 2 p, + P2 q2 = 40 – 2 pz + P, Their total costs are given as; TC, = 10g, TC, =10q; %3D

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

3. Consider two firms producing differentiated products and competing on price choice. Their
demand functions are given below
9, = 40 – 2p, + P2
9, 3 40— 2р, + р,
Their total costs are given as;
TC, = 10q,
TC, = 10q,

b) Suppose firm 1 moves first in choosing price, find the equilibrium price, quantity and
profit for each firm

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