Consider a duopoly where firms sell an homogeneous product and compete in price (Bertrand competition). The cost function of firm 1 is C1 = 20 + 5Q and the cost function of firm 2 is C2 = 8Q. The demand for the product is Q = 100 - 4P. What is the optimal price of Firm 1?

Consider a duopoly where firms sell an homogeneous product and compete in price (Bertrand competition). The cost function of firm 1 is C1 = 20 + 5Q and the cost function of firm 2 is C2 = 8Q. The demand for the product is Q = 100 - 4P. What is the optimal price of Firm 1?

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter9: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 11SQP

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Consider a duopoly where firms sell an homogeneous product and compete in
price (Bertrand competition). The cost function of firm 1 is C1 = 20 + 5Q and
the cost function of firm 2 is C2 = 8Q. The demand for the product is Q
= 100 - 4P. What is the optimal price of Firm 1 ?

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