5. Consider a industry has two firms which produce heterogeneous goods y and y2. Suppose each...

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5. Consider a industry has two firms which produce heterogeneous goods y and y2. Suppose each having marginal costs equal to zero and the consumers' inverse demand functions are given by P1 = 20 - 2y1 - y2 P2 = 20 - Y1 - 292 (a) (10%) Show the Cournot equilibrium output for firm 1. (b) (10%) Show the Bertrand equilibrium price for y. 5. Consider a industry has two firms which produce heterogeneous goods y and y2. Suppose each having marginal costs equal to zero and the consumers' inverse demand functions are given by P1 = 20 - 2y1 - y2 P2 = 20 - Y1 - 292 (a) (10%) Show the Cournot equilibrium output for firm 1. (b) (10%) Show the Bertrand equilibrium price for y.

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a Firm 1s profit is 1 P1Y1 20 2Y1 Y2Y1 Firm 2s profit is 2 P2Y2 20 Y1Y2 FOCs 1Y1 20 2Y1 Y2 2Y1 0 2... View the full answer