Suppose that identical duopoly firms have constant marginal costs of $ 10 per unit Firm 1 faces a demand function of q 1 100 2p 1 p 2 , where q 1 is Firm 1 s output, p 1 is Firm 1 s price, and p 2 is Firm 2 s price Similarly, the demand function Firm 2 faces is q 2 100 2p 2 p 1 Solve for the Nash B...

Firm 1 wants to maximize its profit 1 p 1 10 q 1 p 1 10100 2 p ...

Suppose that identical duopoly firms have constant marginal costs of $ 10 per unit. Firm 1 faces

Question:

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 q₂ = 100 - 2p₂ + p₁. Solve for the Nash- Bertrand equilibrium.