Question: Consider a market with two rms, A and B, producing two varieties of the same product with dierent qualities. In particular, the variety produced by

Consider a market with two rms, A and B, producing two varieties of the same product with dierent qualities. In particular, the variety produced by rm A has quality VA = 2, while the variety produced by rm B has quality VB = 10. Firm A costs are T CA(qA) = 1/2qA, while rm B costs are T CB (qB ) = 2qB

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