Suppose that identical duopoly firms have constant marginal costs of $10 per unit. Firm 1 faces a demand function of q1 = 70 – 2p1 + 1p2, where q, is Firm 1's output, p4 is Firm 1's price, and p, is Firm 2's price. Similarly, the demand Firm 2 faces is 92 = 70 – 2p2 + 1p1. Solve for the Bertrand equilibrium. In equilibrium, p, equals $ and p, equals $ (Enter numeric responses using integers.)

Suppose that identical duopoly firms have constant marginal costs of $10 per unit. Firm 1 faces a demand function of q1 = 70 – 2p1 + 1p2, where q, is Firm 1's output, p4 is Firm 1's price, and p, is Firm 2's price. Similarly, the demand Firm 2 faces is 92 = 70 – 2p2 + 1p1. Solve for the Bertrand equilibrium. In equilibrium, p, equals $ and p, equals $ (Enter numeric responses using integers.)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter12: Price And Output Determination: Oligopoly

Section: Chapter Questions

Problem 2E

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