P, = 100-Q,- BQ2 P2= 100- BQ, - Q2 BR1: Q, = 25-2Q2 4 BR2: Q2 = 25- 4 (Product Differentiation Problem) In the case when beta=1, solve for Nash equilibrium and profits. O Q', = 100, Firm 1 profits = 2800 Q2=100, Firm 2 profits = 2800 O Q; = 100, Firm 1 profits = 0 Q2= 100, Firm 2 profits 0 O Q', = 50, Firm 1 profits = 280 Q'2=50, Firm 2 profits = 280 O Q', = 25, Firm 1 profits = 1200 Q'2= 25, Firm 2 profits = 1200

P, = 100-Q,- BQ2 P2= 100- BQ, - Q2 BR1: Q, = 25-2Q2 4 BR2: Q2 = 25- 4 (Product Differentiation Problem) In the case when beta=1, solve for Nash equilibrium and profits. O Q', = 100, Firm 1 profits = 2800 Q2=100, Firm 2 profits = 2800 O Q; = 100, Firm 1 profits = 0 Q2= 100, Firm 2 profits 0 O Q', = 50, Firm 1 profits = 280 Q'2=50, Firm 2 profits = 280 O Q', = 25, Firm 1 profits = 1200 Q'2= 25, Firm 2 profits = 1200

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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