2. Two webpages offer the same service. The inverse demand for the service is q = 10 – p. Their cost functions are C1(q1) = q1 and C2(92) = 4q2. Suppose firms are simultaneously setting prices, Pi and p2. a) Determine profit functions. b) Are both firms active? Find equilibrium prices, quantities and profits.

2. Two webpages offer the same service. The inverse demand for the service is q = 10 – p. Their cost functions are C1(q1) = q1 and C2(92) = 4q2. Suppose firms are simultaneously setting prices, Pi and p2. a) Determine profit functions. b) Are both firms active? Find equilibrium prices, quantities and profits.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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