Two software firms, Tech Giant and Clipsy, sell a video editor that can place people into their favorite movie scenes. There is a medium-sized market of potential users that is fixed in size. They each spent $1 million to develop the product, but additional copies cost nothing make and sell. Which price will the firms charge in the Nash equilibrium of the Bertrand duopoly game? How much profit do they make?

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In a Bertrand duopoly game the Nash equilibrium is a situation where each fi... View the full answer