I need help working through this problem **Problem: Calculating Output under Bertrand Competition**Two firms both produce leather boots. The inverse demand equation is given by:\[ P = 280 - Q \]where \( P \) is the price of boots in USD per pair, and \( Q \) is the quantity of boots in million pairs.The cost function is given by:\[ C(Q) = 40Q \]If the two firms are Bertrand oligopolists, the output for each firm is equal to:- [ ] 160- [ ] 140- [ ] 180- [ ] 120**Explanation:**Bertrand oligopolists compete by setting prices simultaneously, assuming the competitor's price will not change. In equilibrium, price equals marginal cost, which leads to competitive outcomes. Here, identifying the equilibrium involves determining the production output that equates the price to the marginal cost given the demand function.

According to the question, there are 2 firms in oligopoly and creating the Bertrand model. Let say…

Two firms both produce leather boots. The inverse demand equation is given by P = 280 Q, where Pis the price of boots in USD/pair and Q is quantity of boots in million pair. The cost function is given by: C(Q) = 40Q. If the two firms are Bertrand oligopolists, the output for each firm is equal %3D to: 160 140 180 120

Two firms both produce leather boots. The inverse demand equation is given by P = 280 Q, where Pis the price of boots in USD/pair and Q is quantity of boots in million pair. The cost function is given by: C(Q) = 40Q. If the two firms are Bertrand oligopolists, the output for each firm is equal %3D to: 160 140 180 120

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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