Suppose there are two local firms (firm 1 and firm 2) that supply doormats to a particular area. The demand for mats as a function of its price is given by M = 1200 - 20P, where M is the amount demanded when the price is P per mat. The cost of production for firm 1 is C1(m1) = 10m1 and that for firm 2 is C2(h2) = 20m2 respectively.

Does a Nash equilibrium exists? State what are the output choices of each firm in the Nash equilibrium.

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The detailed answer for the above question is provided below Yes a Nash equilibrium exists in this s... View the full answer