Suppose that identical duopoly firms have constant marginal costs of $20 per unit. Firm 1 faces a demand function of q₁ = 110-2p1 + p2, where q1 is Firm 1's output, p1 is Firm 1's price, and p2 is Firm 2's price. Similarly, the demand Firm 2 faces is 92 110-2p2 + p1. What is Firm 1's profit under the Nash-Bertrand equilibrium, assuming no fixed costs? =

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Suppose that identical duopoly firms have constant marginal costs of $20 per unit. Firm 1 faces a
110-2p1 + P2, where q1 is Firm 1's output, p1 is Firm 1's price, and p2 is
Firm 2's price. Similarly, the demand Firm 2 faces is 92 110-2p2 + p1. What is Firm 1's profit
demand function of 9₁
under the Nash-Bertrand equilibrium, assuming no fixed costs?
=
=
Transcribed Image Text:Suppose that identical duopoly firms have constant marginal costs of $20 per unit. Firm 1 faces a 110-2p1 + P2, where q1 is Firm 1's output, p1 is Firm 1's price, and p2 is Firm 2's price. Similarly, the demand Firm 2 faces is 92 110-2p2 + p1. What is Firm 1's profit demand function of 9₁ under the Nash-Bertrand equilibrium, assuming no fixed costs? = =
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