Question: Suppose that identical duopoly firms have constant marginal costs of
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.
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