The marginal cost for firm, Business Economics

Consider a Bertrand duopoly. The market demand is q=190-p. Consumers only buy from the firm whose price is lower. If two firms charge the similar price, they share the market equally. The marginal cost for firm 1 is 40, and the marginal cost for firm 2 is also 40. There are no fixed costs.

A. Find the Nash equilibrium of this Bertrand game.

B. Find the equilibrium output and profit for every firm.

Posted Date: 3/22/2013 3:59:24 AM | Location : United States







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