Suppose that identical duopoly firms have constant marginal costs of $10 per unit. Firm I faces a demand function of q₁ = 100 - 2p₁ + P2, where q₁ is Firm 1's output, p₁ is Firm 1's price, and P2 is Firm 2's price. Similarly, the demand function Firm 2 faces is q2 = 100 - 2p2 + P₁. Solve for the Nash-Bertrand equilibrium.

Suppose that identical duopoly firms have constant marginal costs of $10 per unit. Firm I faces a demand function of q₁ = 100 - 2p₁ + P2, where q₁ is Firm 1's output, p₁ is Firm 1's price, and P2 is Firm 2's price. Similarly, the demand function Firm 2 faces is q2 = 100 - 2p2 + P₁. Solve for the Nash-Bertrand equilibrium.

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2. Suppose that identical duopoly firms have constant marginal costs of $10 per unit. Firm 1 faces a
demand function of q₁
-
100 - 2p₁ + P2, where q₁ is Firm 1's output, p₁ is Firm 1's price, and p2 is
Firm 2's price. Similarly, the demand function Firm 2 faces is 92 100 2p2 + P₁. Solve for the
Nash-Bertrand equilibrium.
=

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