Consider a market with two horizontally differentiated firms, X and Y. Each has a constant marginal cost

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Consider a market with two horizontally differentiated firms, X and Y. Each has a constant marginal cost of $20. Demand functions are:
Qx = 100 - 2Px + 1Py
Qy = 100 - 2Py + 1Px
Calculate the Bertrand equilibrium in prices in the market.

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Economics of Strategy

ISBN: 978-1118319185

6th edition

Authors: David Besanko, David Dranove, Mark Shanley, Scott Schaefer

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Question Posted: Sep 13, 2017 12:52 AM

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Consider a market with two horizontally differentiated firms, X and Y. Each has a constant marginal cost

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Notice the form of the demand functionthe quantity X sells increases as the price Y charges increase...View the full answer

Economics of Strategy

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