Consider a noncollusive duopoly model with both firms supplying bottled drinking water. The marginal cost for each firm is $1.50. The market demand is shown by the figure on the right. Let us assume that the two firms supplying bottled drinking water are Firm A and Firm B. The price charged by Firm A is denoted as PA and the price charged by Firm B is denoted as PB- Find the demand functions for each of the firms. If PA S$5, then demand for Firm A's bottled drinking water is: thousand if PA PB thousand if PA PB thousand if PA > PB If pg $5, then demand for Firm B's bottled drinking water is: thousand if PB PA C Price 10- 9- 8- 7- 6- 5- 4- 3- 2- 1- 0- 0 0.5 1 Demand 1.5 2 2.5 3 3.5 Quantity (in thousands) 4 4.5

Consider a noncollusive duopoly model with both firms supplying bottled drinking water. The marginal cost for each firm is $1.50. The market demand is shown by the figure on the right. Let us assume that the two firms supplying bottled drinking water are Firm A and Firm B. The price charged by Firm A is denoted as PA and the price charged by Firm B is denoted as PB- Find the demand functions for each of the firms. If PA S$5, then demand for Firm A's bottled drinking water is: thousand if PA PB thousand if PA PB thousand if PA > PB If pg $5, then demand for Firm B's bottled drinking water is: thousand if PB PA C Price 10- 9- 8- 7- 6- 5- 4- 3- 2- 1- 0- 0 0.5 1 Demand 1.5 2 2.5 3 3.5 Quantity (in thousands) 4 4.5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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