ms produce and sell differentiated products that are substitutes for each other. Their demand curves are Firm 1: Q₁ = 40-3P₁+ P2 Firm 2: Q₂ = 40-3P2+ P1 rms have constant marginal costs of $2.40 per unit. rms set their own price and take their competitor's price as fixed. Use the Nash equilibrium concept to determine the equilibrium set of prices. Since the re identical, they will set the same prices and produce the same quantities. librium, each firm will charge a price of $ and produce [ units of output. (Enter your responses rounded to two decimal places.) irm will earn a profit of $. (Enter your response rounded to two decimal places.)

ms produce and sell differentiated products that are substitutes for each other. Their demand curves are Firm 1: Q₁ = 40-3P₁+ P2 Firm 2: Q₂ = 40-3P2+ P1 rms have constant marginal costs of $2.40 per unit. rms set their own price and take their competitor's price as fixed. Use the Nash equilibrium concept to determine the equilibrium set of prices. Since the re identical, they will set the same prices and produce the same quantities. librium, each firm will charge a price of $ and produce [ units of output. (Enter your responses rounded to two decimal places.) irm will earn a profit of $. (Enter your response rounded to two decimal places.)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.5P

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