Alpha and Beta are Bertrand duopoists facing demand Q(P)=25-P/2 and MC=$10. Assume prices must be in whole dollars, but quantity need not be an integer. If Beta knows Alpha will choose the price maximizing total producer surplus, what is Beta's producer surplus if it chooses its best response?

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter8: Understanding Markets And Industry Changes
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Alpha and Beta are Bertrand duopoists facing demand Q(P)=25-P/2 and MC=$10. Assume prices must be in whole dollars, but quantity need not be an integer. If Beta knows Alpha will choose the price maximizing total producer surplus, what is Beta's producer surplus if it chooses its best response?

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