10Two firms produce differentiated products. The demand for each firm’s product is as follows:  Demand for Firm 1: q1 = 20 – 2p1 + p2  Demand for Firm 2: q2 = 20 – 2p2 + p1 Both firms have the same cost function: c(q) = 5q. Firms compete by simultaneously and independently choosing their prices and then supplying enough to meet the demand they receive. Please compute the Nash equilibrium prices for these firms.

10Two firms produce differentiated products. The demand for each firm’s product is as follows:  Demand for Firm 1: q1 = 20 – 2p1 + p2  Demand for Firm 2: q2 = 20 – 2p2 + p1 Both firms have the same cost function: c(q) = 5q. Firms compete by simultaneously and independently choosing their prices and then supplying enough to meet the demand they receive. Please compute the Nash equilibrium prices for these firms.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.4P

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