Addas (Brand A) and Pumba (brand B) are the leading brand names of fitness shoes. The direct
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Addas (Brand A) and Pumba (brand B) are the leading brand names of fitness shoes. The direct demand functions facing each producer are given by qa=180-2pa+pb and qb=120-2pb+pa. Not that the demand functions are not symmetric. Assume zero production cost (ca=cb=0). Solve for the nash-bertrand equilibrium prices (pa,pb). Then, compute the equilibrium output levels (qa,qb), the equilibrium profits and aggregate industry profit.
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