In a duopoly, suppose that the two firms set prices independently (Bertrand model). For each firm, we have the following information: Firm A demand: QA = 120 - 2PA + PB %3D Firm B demand: QB = 120 - 2PB + PA %3D Firm A Price-Reaction Curve: PA = 30 + 0.25PB %3D Firm B Price-Reaction Curve: PB = 30 + 0.25PA Assume MC = TC = 0 Using this information, report on the value of quantity, price, and profits for each firm in the duopoly. You need not show your work.

In a duopoly, suppose that the two firms set prices independently (Bertrand model). For each firm, we have the following information: Firm A demand: QA = 120 - 2PA + PB %3D Firm B demand: QB = 120 - 2PB + PA %3D Firm A Price-Reaction Curve: PA = 30 + 0.25PB %3D Firm B Price-Reaction Curve: PB = 30 + 0.25PA Assume MC = TC = 0 Using this information, report on the value of quantity, price, and profits for each firm in the duopoly. You need not show your work.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter12: Price And Output Determination: Oligopoly

Section: Chapter Questions

Problem 2E

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