Firms derived demand functions and profit functions

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Reference no: EM131112401

Suppose firm 1 and firm 2 each produce the same product, and face a market demand curve by Q=5000-200P. Firm 1 and 2 have the same unit cost of production c=10.

(a) Write down each firm’s derived demand functions, profit functions and best response functions. What is the Bertrand-Nash equilibrium outcome?

(b) What are the profits of each firm?

Reference no: EM131112401

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