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Business, 07.04.2020 16:53 ngilliam1444
Two firms produce and sell differentiated products that are substitutes for each other. Their demand curves are Firm 1: Upper Q 1Q1 = 40minus−3Upper P 1P1+ Upper P 2P2 Firm 2: Upper Q 2Q2 = 40minus−3Upper P 2P2+ Upper P 1P1 Both firms have constant marginal costs of $4.604.60 per unit. Both firms 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 firms are identical, they will set the same prices and produce the same quantities. In equilibrium, each firm will charge a price of $nothing and produce nothing units of output. (Enter your responses rounded to two decimal places.) Each firm will earn a profit of $nothing. (Enter your response rounded to two decimal places.)
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Two firms produce and sell differentiated products that are substitutes for each other. Their demand...
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