Can you help me solve this? I'm having some trouble Consider a market with two firms (Firm 1 and Firm 2), which produce an identical good.Both firms have the same constant marginal cost: MC = m = 40.The demand in this market is given by:Q = 100.25p ⇒ p = 400 - 4QLet p₁, 9₁, and ₁ denote the price charged by firm 1, the quantity firm 1 produces and sells, andfirm 1's profits, respectively. Analogously, let p₂, 92, and ₂ denote the price, quantity, andprofits of firm 2.When appropriate, assume the firms split total quantity and profits evenly.Question 01Assume Firm 1 and Firm 2 compete by choosing prices simultaneously (Bertrand oligopoly withidentical products). Find the price, quantity, and profit of each firm in equilibrium. Which of thefollowing alternatives is correct?(a) P₁ = P₂ = $220, q₁ q2 = 22.5, and ₁ = ₂ = $4,050(b) p₁ = $160, p2 = $220, q1 = 60, 92 = 0,₁ = $7,200, and ₂ = $0(c) P₁ P₂ = $160, q1(d) P₁ = P₂ = $40, 9₁=₂ = $3,600q2 = 30, and ₁ =92 = 45, and ₁ =₂ = $0

Under the bertrand duopoly competition 2 firms sets their price simultaneously. Here both the firms competes based on their price only as the product is homogeneous, hence the firm which is able to sell their products at lower prices captures the entire market. Here the 2 firms competes with each other based on prices. Hence here both the firms attempts to set their price which would be slightly lower than the other firm so that they would acquire the entire market share. In this strategic actions of both firms will continue until the Nash equilibrium is achieved. At the Nash Equilibrium both the firms do not have any incentive to deviate from their existing position. And here Nash Equilibrium is such that both firms charges their price equals to their marginal cost. Now suppose that both firms prices = MC = 40 Now if a firm set their price lower than 40 to acquire the entire market share then they can do but they have to incur losses hence they don't have any incentive to change their position from 40. This is the Nash Equilibrium under the bertrand model of duopoly. Hence here total market equilibrium quantity would be such that : P = MC => 400 - 4Q = 40 => -4Q = -360 => Q = 90 (market equilibrium quantity) This market equilibrium quantity would be distributed equally between both the firms. Hence Q1 = 45 = Q2 # Profit of firm 1 = (P-MC)*Q = (40-40)*45 = 0 # Profit of firm 2 = (P-MC)*Q = (40-40)*45 = 0 Hence the correct answer option is D