Consider a market organized along a 1 mile stretch of road (from D=0 to D=1). Consumers along the stretch of road are uniformly distributed. There are two firms, with Firm 1 located at mile marker .5 and Firm 2 located at mile marker 1.0 and they compete on prices. Customers choose which store to shop at according to P + cD, where c=2 and D is the distance to the store. What is the Nash Equilibrium?

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