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 q_a=180-2p_a+p_b and qb=120-2p_b+p_a. Not that the demand functions are not symmetric. Assume zero production cost (c_a=c_b=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. 

Answer rating: 100% (QA)

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